Ship Repairer Civil Liability Insurance
As the name suggests, the Ship Repairer’s Legal Liability (SRLL) policy covers only what the Shipyard is legally responsible for. This usually involves negligence. In a nutshell, this policy seeks to protect the shipyard if the shipyard is found to be legally liable for damage while a vessel is in the shipyard’s care, custody and control.
Since this policy will ONLY respond when the Shipyard is negligent, the Shipyard will generally rely on this policy when the Owner is maintaining their Hull and Machinery (H&M) and Protection and Indemnity (P&I) coverages and naming and waiving the Shipyard / Grill. Shipyard contractors/affiliates/shipyard parent company, etc. to its H&M and P&I policies.
In order for the SRLL policy to respond, the Shipyard is responsible for showing the Underwriters how the shipyard was negligent.
The type of insurance the Yard has does not determine liability. The Yard’s liability is based on the terms and conditions of the boat repair contract.
However, SRLL subscribers will not respond to a contractual provision that is not included in their SRLL policy.
For any project, the most important thing to consider is that there are no gaps in coverage. SRLL’s policy is designed to protect the yard if you are negligent. Any other situation must fall under the Owner’s H&M or P&I policy where the Shipyard (and its affiliates, subcontractors, etc.) must be named as insured and the insurers must specifically waive subrogation against the Shipyard.
Generally, for there to be a claim under an SRLL Policy, the loss must be traced back to the Shipyard’s negligence when the vessel was in the Shipyard’s care, custody and control.
In case of claim by SRLL, the following procedure must be followed:
o Report the loss immediately to your insurance broker.
o Act prudently, eg take photos, mitigate and assess damage, start collecting documents.
o Revision of the Claims Clause of the Policy.
o If insurers can prove that your rights to recovery were impaired, then they may deny coverage or reduce the amount of the claim by the amount of recovery that they would have been able to receive had their rights not been impaired.
o If repair or replacement amounts are likely to fall short of the deductible, an inspector must be appointed on behalf of the Insurers. The cost of the surveyor is borne by the Insurer.