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Admission of liability

Boat insurance term, area: Liability

Boat owners are often told never to admit fault after a collision. The rule behind that advice is older and stricter than most wordings today. Modern liability conditions usually say that an admission, or a settlement agreed without the insurer's consent, binds the insurer only so far as the claim would have existed anyway. So a skipper who tells the other owner at the pontoon that the damage will be paid has not decided the case: the insurer still examines liability and amount for itself, and normally takes over the negotiation. What matters most is reporting the incident quickly.

What to check: Two questions for your own contract: does it treat an admission given without consent as a breach of duty with consequences for the payout, or only as something that does not bind the insurer? And within what deadline must a third party claim be reported?

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