News Home Video Gallery Newsletters Photo Gallery Cruising Int

 

Sail-World.com : Boatyards and their liability - can they contract it away?

Boatyards and their liability - can they contract it away?

'Boatyard liability waivers - how strong is their case?'    .

If you sign a work order with a shipyard that absolves the shipyard from liability, what are the ramifications? Could this void the boat's insurance policy? Can the shipyard really be absolved from negligence? Des Ryan here discusses some of the issues in a cautionary and awareness-raising article for all yacht owners:

Obviously the answers depend, to some degree, to which country you are in, but in general these these provisions seek to shield the service provider from negligence, or alternatively, limit their liability to a small fixed sum.

The bottom line is, if the protective language is properly worded, it is fully enforceable in most countries - but what is 'properly worded'?

As a general rule, maritime law recognizes the rights of parties to enter into maritime contracts on the terms they choose. However, not all the terms they choose are enforceable under every circumstance. Some may be recognized and enforced as the product of bargaining between the parties to the contract. Others may be invalidated as against public policy regardless of the parties' agreement.

When a shipyard enters into a contract to repair a vessel, it is exposed to three different types of liability. It can be liable for breach of contract, that is, the failure to perform the work as stated in the contract. It can be liable for breach of the implied warranty of workmanlike performance. And, it can be liable for negligence.

Because of the potential financial consequences to the shipyard and/or its insurer for improper repairs, shipyards more often than not put clauses commonly known as 'red letter' clauses in their contracts, which attempt to disclaim or limit liability. Unfortunately, the courts around the world where these kinds of cases occur do not take a uniform approach when determining whether such clauses are valid.

While it is sometimes enforceable to absolved from liability for negligence, a clause 'relieving the shipyard from loss or damage from any cause whatsoever may be unenforceable in the case of negligence of the shipyard or its employees, because such negligence was not specifically mentioned. There is also sometimes a difference drawn by courts between 'negligence' and 'gross negligence'.

Another important issue is that boatyards sometimes also require the boat owner to protect the yard against anyone else who may want to sue them for that damage.

After waiving the right to sue the boatyard for damage, a boat owner may be inclined to file a claim with his or her own insurance company, which leads to another of the questions. How is a claim like this handled, and can it void the insurance policy?

We can’t answer this question without looking at the particular facts of a case and reading the boat owner’s actual insurance policy, but we can make some general observations.

When a marine insurance company pays a claim to a boat owner, the owner is generally required, under the language of
the insurance policy, to assign back to the insurance company his or her right to sue the party responsible for the damage. This is known as an insurance company’s right of 'subrogation.'

Marine insurance policies also include language that prohibits the boat owner from doing anything that would compromise the insurance company’s right to subrogation.

As noted above, most boatyard work orders which require a waiver of any claim against the yard, do so in the event that the boat is damaged at the yard. The contractual language often takes this waiver a step further by including a waiver of the insurance company’s subrogation rights.

These waivers are usually enforceable — and since the waiver impairs the insurance company’s subrogation rights, it
amounts to a breach of the insurance policy by the boat owner, which will result in a denial of the claim.

So, if a yard may absolve itself from liability through the language of its work order, and if the boat owner is breaching
his or her insurance policy by agreeing to the provisions of the work order, what can a boat owner do?

1. First, every boat owner should read his or her insurance policy carefully, to fully understand the circumstances under which an insurance claim may be denied. When shopping for insurance, try to get a copy of the policy before deciding on one insurance company over another.

Many of us select an insurance company simply by looking for the lowest premium, but the language of the policy may vary considerably between companies.

2. Next, boat owners should talk to their insurance broker before going to the yard. The insurance company may offer a policy rider that is available for an additional premium, to provide coverage in the event that the yard agreement seeks to waive claims against the yard for damages.

If a boat is moored in an area with several boatyards to choose from, the owner may want to shop around to compare the contractual language used by the various yards. Unfortunately, this contractual language tends to be fairly standard from yard to yard.

If, however, the project is big and the yard is hungry, a boat owner may be able to negotiate the offending provisions out of the work order — in which case, the insurance policy won’t be affected at all.

The most important thing to take from this discussion is the need to be informed. Boat owners tend to look at insurance policies and yard visits as being fairly routine events, but this is often not the case.

Boat owners should read their insurance policies and the service agreements with all of the vendors that work on their boats. If any of the provisions in these agreements are problematic, they should be discussed with the service provider and a qualified marine insurance broker.

3. Finally, if the legal effect of the language is in question, a qualified lawyer experienced in marine insurance coverage should be consulted.




by Des Ryan

  

Click on the FB Like link to post this story to your FB wall

http://www.sail-world.com/index.cfm?nid=83001

11:34 PM Fri 29 Apr 2011 GMT






Click here for printer friendly version
Click here to send us feedback or comments about this story.


Related News Stories:

11 Jan 2011  New Solas Life Jacket Light from Burke Marine
15 Dec 2010  Product of the Week: Freshield vacuum seal packager
17 Nov 2010  Intellian Appoints New Director of VSAT Sales for The Americas
24 Jun 2010  Doyle Sails announces a major expansion in Sydney - loft re-opens
01 Dec 2009  Salthouse Marine – moves closer to the water
28 Mar 2009  Last chance to list in the Who's Who of Yacht Racing
26 Feb 2009  Nexus Marine acquired by Dean Barker and Richard Macalister
02 Oct 2008  Line 7 announce exclusive Coastal Classic range
18 Sep 2008  52m ketch Mondango launched
31 May 2008  TracPlus onboard with Auckland to Fiji yacht race
MORE STORIES ...

Cruising USA















4.8 million Legos all at sea by Adam Clark Estes,




Dredging activity near corals can increase frequency of diseases by ARC Centre of Excellence Coral Reef Studies,




Understanding the Ocean's role in Greenland Glacier melt by Woods Hole Oceanographic Institution (WHOI),




Three Defensive Docking Strategies for Sailors by Captain John Jamieson, Florida


Revealing report on Search for American yacht Nina released *Feature by Rob Kothe and the Sail-World team,














Baby Nemos finding their way home by ARC Centre of Excellence Coral Reef Studies,










The real ‘Supermoon’ story by Sail-world.com,




Sailor rescued after Facebook call for rescue by RNLI/Sail-World Cruising,










The Galley Guys' favourite shrimp recipe
Vestas Sailrocket 3 - Over the Horizon
BoatUS speaks out about 'Ethanol-at-all-cost Agenda'
Tidal current installations will increase boating hazards
Eco-Sailboat of the future - Catherine Chabaud at work
Calling yachts in the South Pacific - rally to New Zealand
The final touch - which wax should I use on my boat?
ARC Baltic sets sail to discover Europe's 'east sea'
Another boom death. Australian sailor dies, hit by swinging boom
Galley Guru vital to the life of the cruising sailor
'Boat Handling in Marinas' by Rob Gibson - and how to get it reliably
Heart-stopping moment as whale capsizes Zodiac
If we stop killing parrotfish we can bring back Caribbean coral reefs
Climate change could stop fish finding their friends
Vanuatu ups their welcome to cruising sailors with new approach
Criminal charges mooted for owners of sunk HMS Bounty
Red faces after authorities inadvertently aid boat thief to get away
Mobiles drive traffic - 72% increase in Sail-World.com page view *Feature
Sail Estonia: a VERY new idea
Tie This 'Lifesaving' Bowline in Seconds - the easy way!
A Beer Bummel on the Thames River   
Online weather routing - possible? Predict Wind says yes   
Why Boats Sink: Ten best tips on prevention   
The North West Passage calls: Who will answer this year?   
Polish adventure sailor in second try at North West Passage   
Whale research - new techniques expand for non-lethal methods   
Jessica Watson, solo sailing star, four years on...   
Americas solo non-stop circumnavigator crosses Pacific for research   
What is an El Niño and how will it affect my sailing? (Part 1)   
The Dinghy Nav Light Solution- a brilliantly dumb idea   
Spike in water temperatures evidence of ‘irreversible’ El Nino *Feature   
Sailing crew's battle to save yacht lost in the Indian Ocean   
Five Top Tips for selecting the best boatyard   
Tips for selecting the best boatyard   
Predictwind unlocks more features on free accounts   
Composite Rigging launches new campaign for ECsix   
When is a Captain not a Captain?   
Free app for managing your yacht   
Amazing MOB survival - 13 hours floating, rescued by fishermen   
Boater hit by lightning survives: 'It was the worst pain ever'   


For this week's complete news stories select    Last 7 Days
   Search All News
For last month's complete news stories select    Last 30 Days
   Archive News







Sail-World.com  


















Switch Default Region to:

Social Media

Asia

Australia

Canada

Europe

New Zealand

United Kingdom


http://www.sail-world.com/event_images/image/Twitter_logo_small.png http://www.sail-world.com/event_images/image/FaceBook-icon.png  

United States

Cruising Northern

Cruising Southern

MarineBusiness World

PowerBoat World

FishingBoating World

 

Contact

Commercial

News

Search

Contact Us

Advertisers Information

Submit news/events

Search Stories/Text

Feedback

Advertisers Directory

Newsletter Archive

Photo Gallery

 

Banner Advertising Details

Newsletter Subscribe

Video Gallery

Policies

 

 

 

Privacy Policy

 

 


Cookie Policy

 

 



This site and its contents are © Copyright TetraMedia and/or the original author, photographer etc. All Rights Reserved.  Photographs are copyright by law.  If you wish to use or buy a photograph contact the photographer directly.
XLXL NEW Cru USA
LocalAds   DE  ES  FR  IT