Dinghy Insurance

The insured has a general duty of care, and this is referred to in most policies by the phase “due diligence”. It is quite reasonable for an insurance company to anticipate that the insured person will be reasonably diligent in protecting and managing his property.

Section 55 of The Marine Insurance Act 1906 provides that the insurer is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct of the master or crew. In the case of negligent or unskilful navigation, the Courts will normally hold that it should be payable.

WHAT IS INSURABLE INTEREST?

For a valid contract to exist, it is necessary for the insured to have an insurable interest; in other words he should either be the owner, charterer, mortgagee of the boat or have some other beneficial interest.

The Marine Insurance Act 1906 defines an insurable interest as follows:

Every person has an insurable interest who is interested in a marine adventure.

A person is interested in a marine adventure where he stands in any legal or equitable relation to the adventure or to any insurable property at risk. In consequence of which, he may benefit by the safety or due arrival of insurable property, or may be prejudiced by its loss or damage, or may incur liability.
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Additional risks are likely to be incurred whilst racing and different policies have varying requirements. What is certain is that an extra premium must be paid. It is important to remember that an act or error of judgement that may be an infringement of the racing rules will only sometimes amount to negligence for the purposes of the civil law.

The Racing Rules of Sailing require a boat which realises she has infringed a rule promptly to retire or take a penalty. If a boat is covered for racing risks then that cover implies an acceptance by the underwriter of the precise terms of the Rules and RYA Prescriptions. Therefore the duty to retire is not in conflict with the requirement of certain underwriters that no action should be taken which may be construed as an admission of liability.