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Charter damage: do I pay for the next week's lost charter?
Short answer
Charter loss of hire arises when the yacht you damaged misses its next week of bookings.
The charter company may claim the lost income on top of the deposit,
and neither the deposit nor a standard skipper liability policy will usually pay for it.
Anyone who charters in Croatia, Greece or the Balearics knows the deposit: it is the charterer's share of any damage to the yacht, and in most cases it caps the risk. Occasionally the charter company wants more. If the yacht is out of service the following week because of damage you caused, it can claim the lost charter income, and that quickly exceeds the deposit. This tends to happen after damage caused by gross negligence, when the company's hull insurer seeks recovery, or where the charter agreement expressly puts loss of hire on the charterer.
Read the charter agreement before you pay the booking deposit, not after the incident. Does it make the charterer liable for loss of use? Is that liability capped at the deposit, and at what degree of fault does the cap fall away? At check-in, inspect the yacht carefully and record existing damage with photos, so that an old scrape and its downtime are not put on your account. If a bill arrives after the trip, insist on a written, reasoned claim with evidence of the bookings actually lost.
Skipper liability insurance answers for damage you cause to others as skipper. Most policies exclude damage to the chartered yacht itself, which is what the deposit is for, and loss of hire is a consequence of exactly that damage. Specialist charter consequential loss cover exists for this gap, often sold together with deposit insurance. When comparing, look at loss of use and replacement charter, the limit, whether gross negligence is included and which sailing areas apply. If you charter several times a year, an annual policy is usually better value than one per trip.
Worth remembering
Deposit
your share of the damage to the yacht
Loss of hire
the next week that cannot be sold
Read the charter agreement before booking, not after the damage.
Questions
What owners ask us about this
Can the charter company make me pay for the next week's lost booking?
That depends on the charter agreement and on the degree of fault. Usually your risk stops at the deposit, but gross negligence or an express clause can take it beyond that.
Will skipper liability insurance pay for loss of hire?
Usually not, because it excludes damage to the chartered yacht itself, and the lost charter is a consequence of that damage. Separate charter consequential loss cover is designed for it.
What should charter consequential loss cover include?
Look for loss of use of the yacht and the cost of a replacement charter, a realistic limit, gross negligence included and a territorial scope that matches where you sail.
Related
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