So, What IS The Best Insurance For Sailing Clubs?
I’ve been providing insurance programmes to marine-based clubs for over 19 years. If I were to ask that very question to a room full of insurers and insurance brokers who operate in this specialist segment I am quite certain that there would be a deafening clamour as each sought to affirm that their own pet policy or scheme was the very best insurance option for sailing, yachting, cruising and any other marine-based club. An array of whistles, bells and other rinky-dinks would be paraded in great detail, no doubt represented from the point of view of the provider rather than a sailing club. After all, sales people have something to sell and rarely are they able to resist the opportunity to get selling – even when odds as fearsome as this demand selling of heroic proportions – which usually means shouting even louder.
It’s pretty much the same scenario when it comes to insurance marketing in this specialist part of the Marine Leisure Industry. There’s lots of noise from an increasing number of participants with each trying to gain attention by being noisier than everyone else. Lots of noise but very little in the way of differentiation and everyone offering “bespoke” cover with plenty of “unique” features. How on Earth is a sailing club committee to decide exactly what the best option is for their club and its members?
It is against this backdrop that in April this year the Royal Yachting Association (RYA) Vclubshop announced changes to the insurance requirements for their approved training centres: Public Liability (PL) to be increased to a minimum indemnity limit of £3,000,000 and, of greater interest, Approved Centres would need to carry £500,000 of Professional Indemnity (PI) cover in respect of their training activities.
Prima Facie this appeared to be a sensible move. First and foremost, although a trend of “indemnity creep” has seen PL limits nudge upwards in the last few years, a PL limit of £3,000,000 is currently seen as the sensible minimum to carry. Secondly, professional services, including “advice”, are specifically excluded under normal PL Insurance wordings (including marine leisure policies) where it is provided for a fee and, obviously, where training is being delivered for a fee, one would expect some advice to be imparted by an instructor. Training and advice, therefore, is normally insured on a PI policy which is why the new requirement appeared to be a sensible move.
One can only speculate how the announcement of the new requirements was received by training centres – particularly the grass roots not-for-profit sailing clubs for whom every pound counts. An uplift in PL Insurance to a £3m limit would probably not break the bank but PI might, perhaps, be a different matter altogether. Firstly, PI in the Marine Sector can be expensive, even for relatively low limits of cover due to a limited Market appetite. Secondly, where children and/or vulnerable adults are involved in activities, the Market appetite diminishes even more creating further scarcity that could lead to even higher prices.
If the clubs received the news less than enthusiastically, one wonders how certain insurers and insurance brokers might have reacted at the prospect of what appeared to be something of a game changer being announced – for precisely the same reasons as above. Insurers because PI is an anathema to many of them and, brokers, because accessing a market prepared to offer palatable rates in return for the required scope of cover would not be easy.
No doubt everyone breathed a huge sigh of relief then when, just 5 months later, in September, the RYA announced that Professional Indemnity Insurance would not be a requirement after all just so long as a centre’s Public Liability insurance carried an extension that covered their training activities including indemnity for bodily injury to participants.
Cue a meticulous scanning of small print in policy wordings by interested parties to ensure they met the following requirements which are to be implemented by 1 February 2016:
“The purpose of public liability insurance is to indemnify the RTC and its instructors where a third party (which could be a student, customer or a member of the public) suffers personal injury or damage to their property as a result of the RTC’s or instructor’s negligent acts or omissions, and the RTC and/or its instructors is/are required to defend and/or pay damages to the injured party. The RTC must therefore ensure that any instructors employed or engaged directly by the RTC are covered by the RTC’s public liability insurance policy. The RTC’s public liability insurance must extend to indemnify the RTC and its instructors where negligent advice or instruction given by the RTC or its instructors causes personal injury or other damage or loss and the RTC and/or its instructors is/are required to defend the claim and/or pay damages” (RYA Training Notice TN 07-15 dated 7 September 2015).
Helpfully, the statement tells everybody precisely what the purpose of the PL cover is. How then, do we square this with the exclusions regarding training and advice? Well, insurers have addressed this in various ways. One, for example, maintains that as long as they state “Training” within in the business description on their schedule of cover then the explicit exclusion in their policy wording would not apply to the club or centre concerned. Another applies what I consider to be a “safer” option for the club by providing a specific endorsement that confirms tuition is covered.
So, everything’s okay: the centre is indemnified in the event of injury to third parties caused by negligent acts or omissions on the part of their instructors in respect of the advice and instruction provided. Yes? Well, actually, not necessarily.