Is your yacht a floating liability?
The captain had given the yacht’s chef a day off, and all was well—a swim, a trip down the slide, a tender ride—until it wasn’t. While riding an e-foil, the chef reached down blindly and lost a finger in the propeller, an accident that would have a lifelong impact on his livelihood.
Incidents like these are a reminder that even routine moments onboard can quickly become serious liabilities for yacht owners. Beyond the lifestyle and enjoyment that come with ocean travel, luxury yachts carry significant financial, legal, and operational exposures that are often underestimated.
Here, our dedicated experts, who develop insurance programs for some of the world’s largest vessels, lay out all the relevant financial, legal, and operational liabilities and how to mitigate the associated losses.
The top five most common liabilities:
1. Crew injuries.
Crew members work, eat, and sleep onboard, increasing an owner's liability exposure, particularly on heavily staffed vessels. Watersports injuries, line handling, galley accidents, and other high-risk conditions are common sources of injury. Under U.S. maritime law, including the Jones Act and the doctrine of maintenance and cure, vessel owners may be responsible for an injured crew member’s medical care, lost wages, lodging, food, and recovery expenses. Similar obligations may also arise under applicable international maritime and employment laws.
2. Guest injuries.
Once guests come aboard, injuries sustained during the trip become a liability matter for the owner. Tender transfers, personal watercraft, diving excursions, wet decks, and dockside boarding incidents are among the most common sources of guest-related claims.
3. Collision and dock damage.
Navigating a yacht into a tight slip is an art, and with an unexpected tide and wind change, the captain can swerve into another boat or the dock. Even experienced crews can misjudge tight quarters, and collisions with moored yachts are a common risk when departing crowded or unfamiliar marinas.
4. Shipyard exposure.
In a concentrated work area, a single incident—like the spark from a welder’s equipment—can ignite a destructive chain reaction. Shipyards often carry limited liability coverage—an exposure that can become glaringly inadequate when a single incident damages several multi-million-dollar vessels at once. Shipyards also may ask owners to waive rights of subrogation, limiting a carrier’s ability to seek reimbursement from responsible third parties after paying a claim—a request that requires negotiation with carriers.
5. Environmental and pollution liability.
Equipment failure, protocol violations, and improper waste management can lead to spills that damage protected reefs and marine life. In one instance, a small vessel pulled away from the dock with a fuel nozzle still attached, resulting in a serious issue. Even a seemingly minor oil leak can result in fines and penalties, often assessed without limitation, in addition to cleanup costs and potential criminal exposure.
Four steps to mitigate liability
1. Treat the yacht like a business.
Unlike sports cars, which are taken on weekend drives and then safely stored in a garage, yachts operate as full-time assets with daily operational, liability, and personnel exposures. Owners should ensure captains and crew are properly certified, background-checked, and continuously trained. Detailed maintenance records, vendor documentation, and operational logs should be maintained to support claims, satisfy underwriting expectations, and protect resale value. A proactive approach can materially reduce risk while enhancing the vessel’s long-term performance and insurability.
2. Structure ownership through an LLC or LTD.
Set up a dedicated legal entity to own the vessel. This creates a layer of separation between the owner's personal assets and yacht-associated liabilities. Though it won’t prevent lawsuits, it will limit how far a plaintiff can reach your broader estate.
3. Obtain proper protection with a layered insurance program.
A protection and indemnity (P&I) policy is the primary shield against liability claims and should at least cover the boat’s value. A comprehensive program should also include hull and machinery coverage for the physical structure, tenders, toys, and fixed furnishings; crew medical; charter liability; and uninsured boater coverage. High-profile owners might also consider cyber risk, kidnap and ransom (K&R), and hired and non-owned auto coverage. Note: Unlike with auto insurance, where a loss affects rates for up to five years, losses related to yachts follow owners indefinitely.
4. Consult the proper advisors.
Maritime attorneys, yacht insurance specialists, yacht managers, and safety management companies each bring a particular and necessary expertise. Trusted advisors should review each contract, ensure compliance with flag state requirements, and structure a thoughtful program that provides the best insulation against potential issues.
In the end, protecting a yacht owner from liability is nearly as complex as the inner workings of the ship itself. Fortunately, our experts are quite familiar with both. ...
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Bon voyage: smart tips for the safest travel
For many of our clients, traveling is a well-deserved reward for their hard work. They find great pleasure while getting lost in an exciting destination’s local culture, indulging in delicious cuisine at the world’s best restaurants, exploring ancient ruins, and experiencing the beauty of nature while taking in majestic mountains.
Certainly, that is what we hope each journey will be for our clients. Because we are in the risk management business, we know that expected delights can suddenly turn otherwise. Among the travel-related issues we have witnessed: Stolen valuables and travel documents, unexpected illnesses, detainments in foreign nations, natural disasters, even threats of kidnapping or actually being held for ransom.
And so, as the travel boom continues and our clients re-engage their wanderlust, we felt it was a good time to offer some best practices for safe and stress-free vacationing.
Steps to take before you leave
There is a lot you and your team of travel advisors or assistants can do, before you embark, to help ensure smooth sailing. As you dream about your upcoming vacation, we suggest taking care of the following items:
Be informed about the destination: Your concierge or travel advisor should provide general and safety information about the region. (The State Department’s travel.state.gov website is a portal to advisories related to specific countries.) Separately, if you are headed off the beaten path, such as on safari, make sure your advisors provide a network of contacts that can assist in the event of an emergency.
Confirm your travel insurance coverage: Most luxury credit card companies offer a concierge level of travel services including travel insurance. A quick phone call should help understand exactly what will and will not be covered, as there are often many exceptions. Consider medical evacuation and similar coverages that provide extraction services, medical assistance and more. Again, you will want to understand costs and caveats before signing on.
Determine whether you need Kidnapping & Ransom coverage: These policies include negotiation assistance and cover the cost of ransom, among a host of relevant services. Typically, we recommend them to high-profile individuals who will be traveling somewhere with security concerns, but please contact your insurance professional if you want to learn more.
Confirm coverage for valuables you plan to take: Whether you will be traveling with jewelry, art, or other high-cost items, you should make sure your policies’ coverage extends worldwide. Your insurance professional will have this information if you need clarification.
Backup your important documents: Storing copies of your ID, credit card numbers and important phone numbers on the cloud means you will always have easier access to this information, which, in turn, will make it easier to get replacement documents should you need them. If you use a password manager, it is especially critical to be sure your password is not used elsewhere and is challenging for hackers to replicate, as it protects every other password.
Prepare your home: Ask the security company to perform a systems check. Additionally, make sure your backup generator has sufficient gas. And make sure a caretaker or friend has keys (or install a keyless entry) in case trouble arises in your absence.
Share your itinerary: Let people at home know when you are traveling and where you are staying so they can alert authorities should something go awry.
Steps to take on your trip
Your bags are packed, and you are ready to go. Whether you are jetting off via private charter, commercial airlines or embarking on the wide-open seas on a yacht, these strategies will help keep you and your possessions safe so you can simply relax and enjoy the scenery:
Be extra mindful with your valuables: Place geotags on important items you plan to check on commercial planes, to track them should they get lost. Only use the safe in your hotel room for low value items. Instead, use the hotel’s vault for all valuables.
Be aware of your network when traveling: It is important to have a list of contacts where you will be traveling in the event of an emergency. Having a local advocate can be quite helpful.
Be intentional, especially while you are abroad: Because not every locale follows the same due process as the United States does, it is important to research and know the customs of that particular region while vacationing. It is also worth locating the American Embassy in countries you travel in, just in case, and asking your lawyer for the names of colleagues they may have abroad who would be able to help you in worst-case scenarios.
Follow local protocols and laws: Most importantly, be aware of any such local ordinances prior to your travel. Some countries, have tight restrictions or outright prohibitions regarding alcohol. For example, chewing gum is illegal in Singapore and in many Muslim countries, women are expected to dress conservatively and wear headscarves in certain areas.
Wait to post on social media until you are back home: While it is tempting to share your good time with friends and acquaintances, remember that doing so also alerts potential burglars that you are not home. Moreover, if you post while on vacation you can also reveal where you and your family are traveling, thus putting yourselves at risk.
With a little preparation, travel can be joyful and stress-free. Having the proper insurance portfolio to protect yourself against all exposures ensures a delightful adventure awaits you! Following these best practices is the surest way to spend a truly relaxing vacation. ...
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Protecting yourself from common liability risks
An unwelcome consequence of prosperity is that high-net-worth individuals become more vulnerable to the threat of personal liability suits, whether legitimate or not – especially in today’s litigious world. Each year brings a new peak in both the number of cases and the total amount paid out through a settlement or judgment.
Here are today’s most common liability risks and our advice on how to safeguard against them.
1. Risk: Visibility
A magazine feature about your home, social media posts, board service or a garage full of luxury cars — all can attract unwanted attention, even if you aren’t a celebrity.
What you can do
Limit social media posts highlighting your jewelry, luxury vacations, home furnishings, or other obvious signifiers of a high-end lifestyle. Before speaking in public, consider having your remarks reviewed by a professional to ensure that nothing you say could be construed as slanderous.
2. Risk: Minors and Young Adults
As long as minors and young adults permanently reside at your address, you are responsible for their actions. The threat they pose to your liability increases as they get older, such as when they obtain their driver’s license or go to college, where incidents like hazing may occur. Additionally, their social media activity can lead to issues like cyberbullying or unwanted attention to your family’s lifestyle.
What you can do
As a rule, children are often unaware of liability issues, so it’s crucial to keep them fully informed, especially teenagers who are more likely to engage in risky behavior. Consider enrolling them in a defensive driving course and educating them on the significance of safe driving habits. As much as you can, limit or monitor their social media usage, and never allow alcohol or drugs at gatherings you host.
3. Risk: Entertaining
Inviting a large group into your home can be a wonderful experience, but it also comes with elevated liability exposure. Serving alcohol can have serious repercussions should a guest be hurt in a drinking-and-driving or pool accident.
What you can do
If the pool will be open to guests, it is wise to hire a lifeguard, especially if children are present. Ensure that any outside vendors you hire are covered by their own workers’ compensation and general liability policies. Additionally, consult your broker about situation-specific liability protection. If you frequently host parties, confer with your wealth manager and attorney about transferring your property to a trust or LLC to create legal separation in the event of a lawsuit.
4. Risk: Renovations and repairs
Any work being conducted on your property, whether it’s daily maintenance or new construction, exposes you to liability in the event of a worker being injured on the job.
What you can do
When hiring contractors, prioritize those with solid reputations. Limit the number of subcontractors involved and make sure everyone provides proof of workers’ compensation and general liability insurance.
5. Risk: Driving
The potential trouble caused by automobile accidents has increased over the last several years. Texting, talking on the phone or looking at a vehicle’s screen is just as perilous as driving under the influence.
What you can do
Recognize the seriousness of taking eyes off the road, whether you’re getting directions or regulating the air conditioning. Use technological assists, such as Do Not Disturb, to help avoid the temptation of texting. And, of course, never drive while impaired.
Proper Coverage
Accidents happen, and with successful individuals increasingly becoming targets of costly lawsuits, it’s important to not only have personal liability insurance but the correct amount. Personal liability insurance is commonly included in policies like homeowners, automobile, and watercraft. It shields you from losses resulting from negligent acts that cause injury, property damage, or reputational harm, except in the event of criminality or malicious intent. However, the amount of coverage provided by these is often limited, therefore, we often recommend purchasing personal excess liability coverage which provides an additional layer of protection.
Determining the proper amount of coverage requires a thoughtful conversation with your broker but you can start by taking our Liability Assessment Tool, which helps suggest a range of liability based on your lifestyle.
The unfortunate truth is that personal liability risk is everywhere, and while it cannot be entirely prevented, paying extra attention to the scenarios that result in most claims will prove to be beneficial. ...
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Don’t invite risk to your next party
Time to celebrate, and we hope it’ll be a wedding, graduation party, fundraiser or summer soiree to remember—but only in the good ways. Which is why we feel duty-bound to pause your preparations and talk about minimizing risks for (just) a few minutes.
Maybe it’s the particular lenses through which we view the world, but we’ve seen too many festivities ruined by the late arrival of tort lawyers. To make sure that doesn’t happen at (or as a result of) your next celebration, we’ve compiled a list of what can (and often enough does) go wrong at celebrations - along with ways to mitigate the likelihood of that happening. You’ll also learn how to protect yourself in the event something does happen, or at the very least, how to prove that you tried your best to prevent any mishaps from occurring.
How to avoid the problem of…
...someone getting injured:
Use locks, guards (or both) to ensure guests and staff can’t go anywhere off limits. Pools are one of the highest risks at a celebration. Best to seal it off if no one is supposed to swim. For a pool party, we recommend hiring a lifeguard, ban diving, and clearly mark the deep and shallow ends. And we are not just talking the warning signs painted on the pool – place additional signage around the pool area for extra precaution. Trampolines are also danger zones, so unless you like to roll the die, keep guests’ feet on the ground.
...someone damaging or stealing items:
If you have rare art or other valuables in the home, make sure to think through the likely flow of people to ensure nobody gets jostled into the Picasso or climbs on the Calder. Alert staff to anything needing special protection and, if you are still worried, hire someone to make sure that people keep a respectful distance for the Diebenkorn.
...damage to a rental space:
While it’s a fabulous idea to have your anniversary party in the Metropolitan Museum of Art, hired staff should understand the venue’s rules. For example, no hanging the “Congratulations on 50 years” banner on the Temple of Dendur. (You laugh but....)
...a guest drinking and driving:
The law increasingly holds whoever serves liquor is responsible for injuries caused by intoxicated guests, so give the bartender(s) clear cutoff instructions. It’s also a good idea to have someone watch guests as they leave so they can flag a cab for those that clearly need one. Alcohol and teenagers are a particular concern—know that whether or not you gave the okay for a keg party, you might be ultimately liable if the drinking happens in your child’s home.
...someone harassing or harming a high-profile guest:
When the gossip columns are abuzz about the guest of honor at your upcoming book party or fundraiser, prepare for some unwanted attention. Have security in place to deal with paparazzi, gate crashers, or worse.
And how to protect yourself in the event a problem happens...
...don’t assume you are covered through your homeowners or umbrella liability policy:
Purely personal events in your home are usually covered, but it gets trickier if the event is, at all, business-related. It’s one thing to invite a few clients to your holiday party, and another to host a partners meeting. Even a fundraiser for a nonprofit organization could be iffy. Therefore, it is best to speak with your broker before the invitations go out so we can advise you on the best ways to mitigate your risk and ensure you are properly covered.
...put insurance in writing when hiring vendors:
Have every contract, from renting a hall to signing on a caterer, explicitly state which party is responsible for liabilities and which policies must be in place. The expense can be significant, so negotiate insurance when you discuss other terms. A cheap catering hall with an expensive insurance bill is no bargain. Contracts should also specify that any subcontractor must have appropriate coverage.
...talk to your broker about whether you need special event policies:
This coverage is typically combined with cancellation insurance. Note that these policies are precise in what they do and don’t cover. You might be able to make a claim if the bride gets pneumonia, for example, but not if it’s a case of cold feet.
To sum it up, you should add checking your insurance coverage to your party planning list. Ideally you should call your broker before you sign a contract to rent a space or hire a caterer. That way you can get the details right, banish the dark thoughts of potential disasters, and go back to planning a celebration that will delight your guests and honor the occasion. ...
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Why posting vacation photos isn't worth the likes
Remember the infamous Paris hotel robbery of Kim Kardashian West? The criminals relied on the reality star’s Instagram account to plan the attack. In fact, the crime’s mastermind, Aomar Ait Khedache, told Le Monde, “The jewels were shown on the Internet, and the star said that they didn’t wear fakes. . . you just had to look at the Internet and you knew everything, absolutely everything.”
Salacious details aside, there is a lesson to be gleaned as travelers plan their vacation getaways: posting travel photos and itineraries—either before or during—is very risky business. Yet, social media feeds remain full of beach shots, après-ski snaps and European destinations, not to mention hashtags like #travelgram, #instatravel and #vacation. There are three main reasons for concern, even for those with fewer followers than celebrities:
1. Property theft/damage:
Whereas in the past clever burglars would read obituaries to prey on grieving families and empty homes, today’s ambitious thieves turn to Facebook, Instagram and other digital platforms to identify targets and ensure easy access. More than 75% of convicted burglars believe that other burglars are using social media to find targets, according to one police department survey. The tipoffs can be anything from location data to photos showcasing high-worth items like art, electronics and jewelry.
2. Liability:
There are countless horror stories of teens breaking into unoccupied homes to throw a rager, and causing significant property damage. Even worse: If one of the partygoers is hurt, they could sue the homeowner—and win.
3. Family security:
More often than one might imagine, a traveler will share a photo of a plane ticket or boarding pass—essentially providing a road map of their whereabouts. Obviously, this puts travelers and/or their children at greater risk for kidnapping and ransom schemes. It is not difficult to imagine someone with nefarious intentions waiting at a gate with their name on a sign and whisking them away (watch the movie Taken for the very frightening Hollywood version).
Fortunately, each of these situations is easily avoided by employing smart social media practices when it comes to travel. Here, then, are a few sample rules.
Avoid posting photos before or during a trip. If someone really wants to share vacation photos, better to do it with a “latergram.” Safe exceptions can be made for private groups, but they’re only safe if everyone in the group knows not to repost, screen-grab, etc.
Never post a picture of your ticket. Not just for the locational vulnerability, but also because there can be retrievable personal information embedded in these codes.
Block locations. Geotagging is often unintended. And because most smartphone settings automatically track locations, the user needs to actively disable location services. Similarly, avoid “checking into” places on Facebook.
Coordinate meet-ups offline. Don’t use comments to make plans with friends who are also traveling.
Teach the next generation. Digital natives are used to living their life on social media and may not be aware of the potential dangers. Make sure that these best practices are passed along!
While these practices may make a globetrotter’s social media feed less exciting, they will ensure that they, their family and their homebound assets are more secure. Clearly, it’s also important to have the proper insurance portfolio to protect oneself against all exposures. But as a first step, following these guidelines is the surest way to spend a truly relaxing vacation. ...
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Preparing your home for risks
There continues to be significant challenges for clients in today’s insurance market: higher premiums, an increase in non-renewals and more difficulty obtaining policies are just the beginning. But there are things you can do to minimize the impact of such challenges, especially around your home(s). Given today’s risk landscape, we all benefit from thinking about the potential perils at every turn—both the expected and unexpected. From the deep freeze in Texas to the wildfires in California, extreme weather is causing a tempest throughout the industry. The impact is neither limited to the hardest-hit regions, nor is it likely to go away soon.
In any scenario, being prepared can make all the difference, both for your safety in the moment and for risk management in general. As you prepare for the future, our loss control specialist suggests taking the following steps to protect your home and belongings:
1. Create and execute a maintenance plan.
Most people rarely—if ever—think about their home’s electrical, mechanical, and plumbing systems when all appears well. But checking them regularly can minimize costly surprises, especially since changing seasons and passing years take their toll on even the highest-quality materials and networks. The following are different items you may want to include in your annual maintenance plan:
Because outdoor condensation lines clog over time, you will want to inspect them for blockages and clean them when necessary.
Water heaters. Since rust is the big issue here, expect to replace the water heater anode rod every few years.
Water lines. As rubber hoses age, they grow brittle. We recommend replacing them before they spring a leak.
Roofs and chimneys. These are major sources of headaches: leaky roofs can lead to serious structural damage and chimneys need to be kept cleaned and clear (which means checking for unwelcome intruders, like nesting birds).
Exterior wood. This is an especially crucial task in humid areas, as siding is more susceptible to dry rot and infestations. That sort of decay can lead to interior water seepage that damages the home. Inspect for soft spots in the wood and replace sections if necessary. Additionally, keep up with painting and caulking as needed.
Clogs invite trouble because when pooling water has nowhere else to go, it often finds its way inside the house. Also, in wildfire zones, the last thing you want is a gutter filled with flammable debris. So, no matter the location, it’s crucial to keep your gutters clear.
2. Monitor water flow.
Too often we have seen a minor drip turn into a major headache. Whether from a burst pipe, a defective ice machine or a leaky faucet – water loss is the second-most common claim made by our clients. Automatic shut-off devices are highly recommended (if not essential), which alert homeowners to increased flow in pipes and leaks.
3. Pay extra attention at holiday time.
Though the season wouldn’t be the same without them, candles and electrical lights pose additional risks. To make sure the decoration is enjoyable and not worrisome, be on the lookout for potential peril: Is the holiday display too close to the artwork? Will children be playing near the menorah?
4. Give your second home a second glance.
It’s easy to let the routine maintenance of vacation homes slide, and that just compounds the fact that you are not always on-site to detect small issues before they balloon. A to-do list to complete before closing up for the season, or even the week, will help. Things to check off include: Is the heat properly set? Is the water system turned off? Will the caretaker stop by to check on things?
5. Handle collections with care.
Making sure your prized possessions are well protected is paramount. These are some things to consider:
A few inches can separate safety from disaster. We suggest making sure you don’t hang a painting where it can be punctured by a doorknob or pawed by the family dog. Similarly, we recommend you store your collectible car in a well-equipped garage with suitable alarms and security systems. Make sure the building protects against rain, ice, floods, and whatever natural disasters are common in your area.
Be sure to train everyone in the household to not only care for each of the pieces in your collections, but what to do in case of accidental damage. In most cases, hire professional art conservators to do any required cleaning and certainly for any needed repairs. Also, limiting those charged with the task will help limit the risk of theft.
Planning. Train the staff on how to safely and effectively handle situations such as fires or weather incidents. This way, employees know how to properly protect art or other valuables. Establish evacuation protocols—including who is tasked with moving valuables, and to where—as well as conduct practice drills with your staff and family.
Our job is to see risk where others might not, but it’s also to educate our clients to see it too. Along with this article, we have developed a library full of advice and guidance on nearly every risk management concern, as well as a disaster preparedness center. And, of course, we are always available to discuss any questions or worries. Together, we can keep you and your family, as well as your home and possessions, secure. ...
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