Home / For international owners / Chartering out
What if the charterer never brings the boat back?
Short answer
The boat leaves and does not come back.
For anyone chartering out that is the core loss,
and in insurance terms it is misappropriation, excluded in many of the wordings we reviewed.
A boat that is stolen is a covered loss. A boat a hirer simply keeps after the charter ends usually is not. The difference is called misappropriation, and it rests entirely on the fact that you handed over the keys voluntarily. For a private owner that exclusion is right. For someone chartering out it strikes precisely the case the policy was bought for.
Misappropriation is the real risk of the charter business. Several of the wordings we reviewed therefore withdraw the exclusion expressly as soon as charter use is agreed in the policy. Others stay silent, and then the exclusion stands. So look for that write-back sentence before you sign a charter policy.
Our current conditions exclude misappropriation and fraud, with no write-back for an agreed hire. That is a point where we currently stand behind some of the wordings we reviewed, and we would rather tell you than have you find out in a claim. What helps meanwhile: a contract in text form, handover and return records, a checked entitlement of the hirer, and a deposit at least equal to the excess.
Worth remembering
Taken away
is not the same as stolen
On that word
the hull cover turns
For the owner it is the core loss. In insurance terms it is first of all a question of wording.
Questions
What owners ask us about this
Is that not simply theft?
Not legally. Theft is taking against your will; misappropriation is keeping something you gave up voluntarily. For cover, that is the whole difference.
What should I do first?
Demand return in text form, set a deadline, report it to the police and notify us. That separates a payment dispute from an insured event.
Related
Not sure whether you qualify?
Whether it is “What if the charterer never brings the boat back?” or another question: send us your residence and the flag your boat flies. You will get a straight answer in one email; including a no, if that is the answer.
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