Third party damage or damage to my own boat: which cover pays?

After any incident on the water the first question is whose property was damaged. Third party damage hits someone else: the yacht in the next berth, the pontoon, a swimmer or a guest on board. That is what third party liability cover is for. Own damage hits your own boat, its engine or its equipment, and only hull cover pays for that. Liability never pays to repair your own boat, and hull cover never pays someone else's claim against you.

Liability claims come in three kinds. Bodily injury covers medical costs, lost earnings and compensation for pain and suffering. Property damage covers the repair or replacement of what you hit. Financial loss that follows from it, such as a charter yacht losing a week's bookings after a collision, can also be claimed. A good liability policy also checks whether a claim is justified at all and defends you against claims that are not, which can matter as much as the payment.

What to do: if you touch another boat while berthing, report the damage to that boat under your liability cover and the damage to your own hull under your hull cover, if it includes accidental damage. Photograph both boats, take the other owner's name and berth number, and do not admit liability in writing before your insurer has looked at the case. If a guest is hurt on board, that is a liability matter whenever you may be at fault.

Worth remembering

After a bump in harbour, report it under both.