Marine insurance companies evaluate the risk of a particular vessel policy based on several factors; the physical condition of the boat is an important consideration. The survey report is usually their main method for evaluating the condition of the boat, and they invariably require the listed “recommendations” to be addressed as a condition before issuing or renewal of a policy.
It is important that the engaged surveyor for the condition inspection of the vessel, clearly states in the survey report the level of importance attached to each defect. Recommendations could be labelled for example A, B or C:
- A: Priority – as it affects the vessel’s safety
- B: To be rectified within a given time frame
- C: Cosmetic
A boat owner should not however, assume that he can pick and choose which recommendations he will rectify believing that the insurance provider will be unlikely to learn of any oversight.
Marine insurance policies are generally controlled by the doctrine of “uberrimae fidei”, requiring the policy holder to to deal in “utmost good faith”. This doctrine requires the vessel’s owner to disclose any information that may be related in any way to the coverage that is being considered, and to deal with the insurance company in good faith. Failure to do so, may lead to denial of an insurance claim, even if the oversight had nothing whatsoever to do with the loss.
If the insured disagrees with or is unsure of any of the recommendations contained in the report, the first course of action should be to discuss the report with the surveyor. An ideal opportunity in fact for the boat owner to gain some valuable advice…..