Renting out your own boat privately: what to check in liability and hull cover

A motor boat on a lake that goes to acquaintances for a few weekends, a sailing yacht that hosts guests for two weeks in summer through a rental platform, a jet ski handed over for a day rate: renting out your own boat privately earns a little money and carries a risk that many owners only notice after a claim. What to check in liability and hull cover is rarely the same thing. A liability wording may already name occasional rental in its description of the insured risk, while a hull wording may only accept it once it has been applied for and written into the schedule.

Start with liability. Some wordings describe the insured risk as the owner's legal liability arising from keeping, possessing and using a pleasure craft used privately or rented out occasionally, with occasional defined as a limited number of days per insurance year, for example 30, and without professional crew. Where the wording reads like that, no separate application is needed for a few rental days. Read the definition word by word: whether the limit counts days or rental periods, and whether it excludes boats handed over with a skipper, decides whether your summer plan fits. Check as well whether the hirer's own personal liability is addressed at all, or only yours as the owner.

Above that limit, the rules usually change. Many wordings then require the rental to be declared and recorded separately in the schedule. Some cap each single rental at a fixed number of consecutive days, others also allow commercial rental for private use. Look for two further conditions that often apply: a genuine rental agreement must exist, and the cover may be subsidiary, meaning the insurer only pays where no other insurer is liable. Many wordings also oblige the owner to make sure the boat is only used by an authorised skipper holding the licence required by the authorities, which in practice means asking to see it.

Hull cover is often stricter, even for a handful of rental days. Look for a clause on private rental and read its conditions: it may require that the rental is applied for and documented in the schedule or an endorsement, that rental days stay below a yearly limit, and that a rental agreement under civil law exists. Frequent or commercial rental is usually a separate clause with the same requirement of prior agreement. Here too the cover may be subsidiary, so if a rental platform arranges its own insurance for the rental period, that cover is likely to be asked first after a loss.

The decisive sentence is often not in the clause on rental at all, but in the section on increase of risk. A number of hull wordings state that renting, chartering or otherwise handing over the vessel to third parties for payment counts as an increase in risk unless it was agreed. The owner then needs prior consent and must report it without delay. Depending on the wording and on the law that governs the contract, consequences can range from termination or a higher price for the cover to a reduced or refused claim if the duty was breached through gross negligence or intent. Check whether the wording lets you keep the claim if you prove that the rental did not cause the loss.

Two related points are easy to miss. Lending a boat to a friend free of charge is usually not rental, since the clauses tend to refer to payment and a rental agreement, but licence requirements still apply: hull wordings commonly exclude damage caused by someone without the licence required for the boat and the cruising area. And if the boat is laid up for repairs after a loss, lost rental income is usually not paid; many wordings exclude indirect losses and some name the case of a vessel that cannot be rented out during repairs explicitly. Before the first hirer casts off, the schedule, a written rental agreement, a copy of the hirer's licence and a handover report with photos are worth more than any discussion afterwards.