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YACHT INSURANCE
                   

United Yacht Insurance

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Terms and Glossary
A-B
  • Abandonment

    Giving up the proprietary rights in insured property to the underwriter in exchange for payment of a constructive total loss.

  • Actual Total Loss

    1. The insured property is completely destroyed; or
    2. The insured is irretrievably deprived of the insured property; or
    3. Cargo changes in character so that it is no longer the thing that was insured (e.g., cement becomes concrete); or
    4. A ship is posted "missing" at Lloyd's, in which case both the ship and its cargo are deemed to be an actual total loss.

  • Adventure

    The exposure of property to risk at sea.

  • All Risks

    All fortuitous causes of loss. It does not embrace inevitable loss such as wear and tear.

  • Annual Policy

    Designed for clients with small turnover of Goods in Transit. A deposit premium is paid and this is adjusted at the end of the year based on declarations made.

  • Application

    A written form submitted to underwriter to obtain quotation for a risk, and contains particulars of the risk.

  • Assignment

    The passing of beneficial rights from one party to another.

  • Average

    Partial loss or damage.

  • Average Adjuster

    Appointed by the shipowner to prepare General Average Statement

  • Average Clause

    The clause in marine policy which sets out the coverage provided in the event of partial loss.

  • Average Irrespective of Percentage

    Indicates that partial losses will be paid regardless of any franchise or percentage.

  • Avoidance

    The right of an underwriter, in the event of a breach of good faith or delay in commencement of an insured voyage to step aside from the insurance contract and to treat it as though they had never accepted the risk.

  • Barratry

    A criminal or wrongful act by the ship's master or crew causing loss or damage to the ship or cargo.

  • Benefit of Insurance Claim

    A clause by which the bailee of goods claims the benefit of any insurance policy effected by the cargo owner on the goods in care of the bailee. Such a clause in a contract of carriage issued in accordance with the Carriage of Goods by Water Act is void at law.

  • Bottom Limit

    The maximum value at risk per shipment/sending/aircraft.

C
  • Certificate of Insurance

      A document presented by the insurance company or insured as evidence that insurance is in effect. The insured may assign his rights under this negotiable document to a third party, usually the consignee, by endorsing the reverse of the certificate.

  • Charter Party

      The contract evidencing the agreement of a shipowner to lease his vessel to another person or firm.

  • Co-Insurance

      Where two or more parties share the same risk. A co-insurer is not obliged to follow the decision of another co-insurer, except where they have given authority for the other party to act on their behalf. Each co-insurance is a separate contract with the insured.

  • Collision

      Physical impact between two or more ships or vessels used for navigation. In collision liability insurance, the term does not include contact of the insured vessel with anything other than a ship or vessel.

  • Compromised Total Loss

      An arranged settlement on a hull policy where there is not claim for actual or constructive total loss, but where it is impractical to repair the vessel.

  • Constructive Total Loss

      The position which exists when the cost of repairing or recovering lost or damaged property plus the value of the salvage would exceed the property's value when repaired or recovered.

  • Contingency Insurance (Seller's Insurance)

      A secondary insurance coverage which will protect an insured's financial interest if the primary insurance coverage effected by others does not respond for a covered loss.

  • Contribution

      This relates to situations where more than one party covers the risk. Each party is deemed to be liable for its portion of the loss. If the insured has recovered in full from one insurer, that insurer is entitled to recover from the other insurer that part of the loss which should have been paid by the latter. The term, as used in marine insurance, also applies to contributions paid by the insured in connection with salvage and/or General Average.

  • Contributory Value

      The value of property saved as a result of a General Average Act which forms the basis for determining each party's contribution in General Average.

  • Cover Note

      A non-negotiable document evidencing insurance which may or may not indicate the terms of coverage.

  • Custom Broker

      A firm which specializes in clearing imported merchandise for transit to the interior. Normally responsible for obtaining and submitting all documents for clearing merchandise through customs and arranging inland transport as well as paying all charges related to these functions.

  • Customs Entry Form

      A form required by Canada Customs for all merchandise entering Canada. It indicated country of origin, description of merchandise and amount of estimated duty to be paid before merchandise is released by customs.
 
 
D - E
  • Declaration

      Form used by insured in reporting shipments under an Open Cargo Policy when no evidence of insurance is required.

  • Deductible

      A specific dollar amount, or percentage of the insured value, which will be deducted from all losses recoverable under a policy.

  • Disclosure

      The duty of the insured and his broker to tell the underwriter every material circumstance before acceptance of risk.

  • Earned Premium

      This applies when insurance is terminated before the expiry date of the insured period. The earned premium attaching to the period during which the underwriters have been on risk.

  • Excess Liabilities

      Insurance to cover the excess amount of liability for general average contributions, salvage claims, sue and labour charges and three-fourths collision liability where the full amount is not covered by a hull policy.
 
 
 
F - G
  • Free of Particular Average, American Conditions (FPAAC)

      Average clause which limits recovery of partial losses to those caused by fire, stranding, sinking or collision.

  • Free of Particular Average, English Conditions (FPAEC)

      Same as FPAAC except that the partial losses referred to are recoverable if the vessel has stranded, sunk, burned, been on fire in collision, regardless of whether such losses were actually caused by any of these perils.

  • Franchise

      Like a deductible, but if the amount of the merchandise is met or exceeded, the loss is paid in full.

  • General Average

      Loss arising through a voluntary sacrifice of any part of the ship or cargo, or an expenditure, to safeguard the ship and the rest of the cargo.

  • General Average Contribution

      Such losses or expenditures are contributed to by all the interest at risk on the basis of their respective values.

  • General Average Bond

      Document require of cargo owners, after a GA loss, obtaining their agreement to pay any contribution that may become due.
 
 
H - I
  • Held Covered

      A provisional acceptance of risk, subject to confirmation that cover is needed at a later date. Where applicable to an existing insurance, coverage is conditional, in practice, on prompt advice to the underwriter as soon as the insured is aware of the circumstances to be held covered coming into effect, and a reasonable additional premium is payable if the risk covered comes into effect.

  • Insurable Interest

      It is illegal for anyone to insure without an insurable interest, or in the case of marine insurance, a reasonable expectation of acquiring such interest. In general one has such interest when one's relationship to property at risk may expose one to loss or liability where one stands to gain by the safety of the property.
 
 
J-K-L-M
  • Jettison

      Throwing the cargo or ship's property overboard to save other property from a common danger.

  • Letter of Credit

      Method of payment between buyer and seller. The buyer opens a Letter of Credit in favor of the seller at his local bank by depositing the amount of the purchase price and dictating certain documents which the seller must present in order to obtain a payment. The Letter of Credit will be sent to a bank in the vicinity of the seller and upon presentation of the documents called for, the local bank will release payment.

  • Material Circumstances

      Any circumstances which would influence the judgment of a prudent underwriter in determining whether to accept a risk and the amount of premium to change.

  • Material Representation

      A statement made to the underwriter before acceptance of risk which is material to the decision in accepting and rating the risk.
 
 
N - O
  • Non-Disclosure

      The failure of the insured or their broker to disclose a material circumstance to the underwriter before acceptance of the risk. A breach of good faith.

  • Notice of Abandonment

      A condition which must precede a constructive total loss. If the insured fails to give notice to the underwriter, the loss can be treated only as a partial loss unless an actual total loss is proven. An underwriter who accepts notice admits liability for the loss. Notice is not necessary where it would not benefit the underwriter, where the underwriter waives the obligation or in the case of a re-insurance provided the policy incorporates the "waiver" clause, action taken by an underwriter to prevent or reduce the loss is not deemed to be an acceptance of abandonment.

  • Overage Additional Premium

      All additional premiums charged on an open cover declaration where the carrying vessel is outside the scope of the classification clause. It may be applied, also, to additional premium charged for breach of navigational warranties (e.g., institute warranties) where the ship is more than 15 years old.

 
 
P - R
  • Particular Average

      A particular loss caused by marine perils, other than a General Average loss.

  • Perils of the Sea

      Hazards arising on navigable waters through natural forces such as abnormally heavy seas, high winds, etc.

  • Proximate Cause

      The most direct cause of loss, that is, the most effective, but not necessarily the last, in a series of events.

  • Recovery

      The amount recovered from a third party responsible for a loss on which a claim has been paid.

  • Representation

      A statement of fact made by the insured or their broker when negotiating insurance with the underwriter.

 
 
S
  • Sacrifice

      The deliberate casting away or destruction of property to prevent greater loss. General Average sacrifice is for the common good and saved interests make good the sacrifice in proportion to the saving enjoyed.

  • Seaworthiness

      There is an implied warranty in every voyage policy that the ship must be seaworthy at the commencement of the insured voyage or, if the voyage is carried out in stages, at the commencement of each stage of the voyage. To be seaworthy, the ship must be reasonably fit in all respects to encounter the ordinary perils of the contemplated voyage, properly crewed, fuelled and provisioned, and with all her equipment in proper working order. Cargo policies waive breach of the warranty except where the insured or their servants are privy to the unseaworthiness. Breach of the warranty is not excused in a hull voyage policy, literal compliance therewith being required.

      Although there is no warranty of seaworthiness in a hull time policy, claims arising from unseaworthiness may be prejudiced if the ship sails in an unseaworthy condition with the knowledge of the insured.

  • Settling Agent

      An underwriter's representative who is authorized to settle claims.

  • Salvage Charges

      The reward payable to salvors for saving life and property at sea.

  • Single Transit Policy

      "One Off" insurance for those clients who require transit cover on an infrequent basis.

  • Subrogation

      The right of the underwriter to step into the shoes of the insured, following payment of a claim, to recover the payment from a third party responsible for the loss. Subrogation is limited to the amount paid on the policy.

  • Sue and Labour Charges

      Charges incurred by an insured in averting or diminishing a loss. They are recoverable in addition to the full sum insured.
 
 
U-V-W-X-Y-Z
  • Utmost Good Faith

      A basic principle of insurance. Mutual trust in negotiating an insurance contract. The insured and their broker must disclose and truly represent every material circumstance to the underwriter before acceptance of the risk. A breach of good faith entitles the underwriter to avoid the contract.

  • Voidable Policy

      Where the underwriter has the right to avoid a policy (e.g., in the event of a breach of good faith), the policy is termed "voidable."

  • Without Prejudice

      Occasionally claims may be paid which the underwriter feels are not actually covered by the policy. Such payments are "without prejudice" and are not to be treated as a precedent for future similar claims.

  • York/Antwerp Rules

      An international code governing General Average.
 
 
UNITED YACHT INSURANCE
 
 
by W.R. Hodgens Marine Insurance, Inc.
2015 SW 20th St., Suite 100   Fort Lauderdale, FL 33315
Ph: 954-523-6867 Fax: 954-523-6488
Toll Free USA:  800-990-WAVE (9283)
 
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