Superyacht Insurance: Florida & Caribbean Guide

Hull and Machinery: What Your Policy Actually Covers

Hull and machinery (H&M) cover pays for physical loss or damage to your vessel — the hull, machinery, equipment, and permanently installed gear. For a superyacht, the scope of what counts as 'permanently installed' matters enormously: tenders, jet skis, dive compressors, stabilizer systems, and watermakers all need to be scheduled or specifically included. If they are not listed, assume they are not covered.

The underlying policy form governs how losses are adjusted. Most specialist superyacht placements are written on Institute Yacht Clauses or a manuscript form that incorporates Inchmaree clause language, which extends cover to loss caused by the negligence of the master or crew, latent defects in machinery, and bursting of boilers. Without Inchmaree-equivalent wording, a mechanical failure that causes a sinking could be excluded entirely — the underwriter would argue it was not an external peril.

Sue-and-labour obligations run alongside your H&M cover. If your yacht is in danger, you are contractually required to take reasonable steps to prevent or minimize loss, and your policy should reimburse those costs separately from the main claim. On a large motor yacht, that might mean emergency towage, temporary repairs in a foreign port, or hiring a salvage team — costs that can rival the underlying damage. Confirm with your broker that your sue-and-labour clause is not subject to the same deductible as the main loss.

General average is a separate exposure. If your vessel is involved in a casualty where the master declares general average under York-Antwerp Rules, every party with a financial interest in the voyage — including cargo owners aboard a charter — must contribute proportionally to the sacrifice or expenditure that saved the voyage. Your H&M underwriter will typically appoint an average adjuster and advance your vessel's contribution, but the process can take years and the paperwork burden on you as owner is substantial. Make sure your policy includes general average and salvage charges cover, and that your broker explains how it interacts with any charter party you have signed.

Named Storm Deductibles and Your Hurricane Plan

The Atlantic hurricane season runs June 1 through November 30. This is the single most consequential underwriting factor for any Florida-based yacht. Named storm deductibles — applied separately from your standard deductible and calculated as a percentage of the agreed hull value — are standard on policies covering vessels that remain in a named storm zone during the season. The deductible applies per named storm event, not per policy year, so a vessel that sustains damage from two separate storms in one season faces two deductible applications.

Most specialist underwriters will ask for a written hurricane plan before binding or renewing cover. Your plan needs to specify where the vessel will be during the season, who is responsible for moving it, and what the trigger is for action (typically a defined number of hours before a storm's projected landfall). Vague plans — 'we will move the boat if a storm threatens' — are not acceptable. Underwriters want named individuals, named ports or storage facilities, and a documented chain of command that works whether the captain is aboard or not.

Navigation limits and named storm zones are directly linked. A policy that allows Caribbean cruising year-round may carry a broader named storm zone than one that restricts the vessel to the Gulf of Mexico from June through November. If your cruising plans take you south of a defined latitude during hurricane season, your deductible may increase, your cover may be suspended, or you may need a specific endorsement. Review your navigation warranty carefully — breaching it, even unintentionally, can void a claim entirely.

Lay-up credits are available if you haul the vessel or place it in a recognized hurricane storage facility for a defined period. The credit reduces your premium for that period, but the lay-up conditions are strict: the vessel must be out of the water or in a named facility, engines may need to be winterized to a specified standard, and any work done during lay-up may require underwriter approval. Coming out of lay-up early without notifying your broker reinstates your exposure without reinstating your cover.

Protection and Indemnity: Your Third-Party Liability Layer

Protection and indemnity (P&I) cover pays third-party bodily injury and property damage claims arising from the operation of your vessel. For a superyacht, the most significant P&I exposures are crew injury and illness, passenger liability on charter, collision liability above what your H&M policy pays, and wreck removal. Each of these can generate claims that dwarf the hull value of the vessel.

Crew cover under P&I intersects with the Maritime Labour Convention 2006 (MLC 2006). If your vessel is 500 GT or above and operates commercially — including private charter — MLC 2006 imposes mandatory financial security requirements for crew repatriation, wages in the event of abandonment, and compensation for death or long-term disability. Even if your vessel falls below the MLC threshold, your employment contracts and flag state requirements may impose similar obligations. Your P&I cover should be reviewed against those contracts line by line, not assumed to be adequate.

Collision liability under a standard H&M policy is typically limited to three-quarters of the claim, with the remaining quarter falling to P&I — a legacy of the old running-down clause structure. On a superyacht, a collision with another vessel, a marina, or a fixed structure can produce a liability claim that exceeds your hull value many times over. The Convention on Limitation of Liability for Maritime Claims (LLMC) provides a statutory cap on certain liability claims calculated in Special Drawing Rights relative to vessel tonnage, but that cap is not a substitute for adequate P&I limits, and it does not apply to all claim types. Your broker should be asking the underwriter what the effective combined H&M and P&I collision response looks like for your specific vessel and trading area.

Wreck removal is an often-overlooked P&I exposure. If your vessel sinks in a navigable waterway, the US Coast Guard and relevant port authorities can compel you to remove the wreck at your expense, regardless of fault. Wreck removal costs on a large motor yacht can be substantial, and they are a third-party liability, not a hull claim. Confirm that your P&I policy includes wreck removal cover and that the limit is proportionate to your vessel's size and the waters you frequent.

Charter Use: How Commercial Operation Changes Your Cover

Operating your vessel for charter — whether bareboat, crewed, or term charter — changes your insurance requirements materially. A private pleasure policy does not respond to claims arising from commercial charter use. If a guest is injured during a paid charter and your policy is written on a private pleasure basis, your P&I underwriter has grounds to deny the claim entirely.

Charter cover requires a commercial endorsement or a separate charter liability policy. The underwriter will want to see your charter contract, your standard terms and conditions, your captain's credentials and experience record, and your safety management procedures. If you are flagged in a jurisdiction that requires a commercial vessel certificate or a USCG Certificate of Inspection, those documents need to be current before cover is bound.

Your charter contract itself creates insurance obligations. Most professionally drafted charter agreements require the owner to maintain specified P&I limits, to name the charterer as an additional insured for certain liabilities, and to provide evidence of cover before the charter commences. If your policy does not permit additional insured endorsements or if your P&I limits fall below the contract minimum, you are in breach of the charter agreement before the guests step aboard. Bring your charter contract to your broker, not just your vessel particulars.

If you operate under a USCG-documented vessel and carry paying passengers, the Limitation of Liability Act (46 U.S.C. § 30501 et seq.) may allow you to limit your liability to the post-casualty value of the vessel — but that protection is not automatic, it requires a federal court proceeding, and it does not apply to all claim types. Do not rely on statutory limitation as a substitute for adequate P&I cover.

What to Bring When You Request a Quote or Renewal

Superyacht underwriters make their decisions based on the quality of information you provide. A complete submission gets a faster response and a more accurate premium. An incomplete one either stalls or results in exclusions that you discover only at claim time.

For hull and machinery, your broker needs the vessel's agreed value, year of build, builder, flag state, current survey status (out-of-water survey, condition and valuation survey, or class certificate if applicable), and a full inventory of tenders, toys, and high-value equipment. If the vessel has had recent claims or incidents, disclose them — non-disclosure of material facts can void the policy under the duty of utmost good faith that governs marine insurance contracts.

For P&I and charter, the underwriter will want your captain's resume and license, crew list with roles and certifications, your hurricane plan, your navigation area for the coming policy year, and a copy of any charter contracts or management agreements in place. If you are planning a significant voyage — a transatlantic passage, a season in the Mediterranean, or a transit through a designated war risk zone — notify your broker before you depart, not after.

• Vessel particulars: LOA in feet, beam, draft, year built, builder, hull material, engine configuration
• Current agreed or market value with supporting appraisal or survey
• Flag state and USCG documentation number or state registration
• Survey reports: condition and valuation, out-of-water, or class certificate
• Captain's resume, USCG license or equivalent, and sea service record
• Crew list with roles, certifications, and MLC employment contracts if applicable
• Hurricane plan: named storage facility or hurricane hole, trigger criteria, responsible party
• Navigation plan for the policy year, including any planned extended passages
• Charter contracts or management agreements, if any
• Claims history for the past five years

Navigation Limits, Cruising Grounds, and War Risk

Your policy's navigation warranty defines where your vessel is covered. A typical Florida-based superyacht policy might cover the US East Coast, the Gulf of Mexico, the Bahamas, and the Caribbean as far south as a defined latitude. Cruising beyond those limits — to Central America, South America, or across the Atlantic — requires a navigation extension, which may carry an additional premium and additional conditions.

The Bahamas and the Eastern Caribbean are generally insurable on standard terms, though some underwriters apply higher deductibles or restrict cover in specific island groups based on loss experience. The Gulf of Mexico presents its own named storm exposure, particularly for vessels based in Tampa Bay or along the Florida Panhandle, where storm surge and wind damage from Gulf hurricanes can be severe.

War risk and piracy are excluded from standard H&M and P&I policies and must be purchased separately. For vessels cruising in or transiting through areas designated as high-risk by the Joint War Committee — which publishes a listed areas notice that is updated periodically — war risk cover is not optional, it is a condition of operating safely and maintaining your standard cover. If your cruising plans take you anywhere near the Caribbean coast of Central America or you are considering a passage that routes through any listed area, discuss war risk cover with your broker before you depart.

US Coast Guard documentation and state registration affect your policy in practical ways. A federally documented vessel is subject to federal maritime jurisdiction, which governs how certain claims are adjudicated and which limitation of liability statutes apply. State-registered vessels may be subject to different rules depending on the state. Your broker should understand which regime applies to your vessel and structure the policy accordingly.

Frequently asked questions

Do I need a separate named storm policy, or is it part of my hull cover?

Named storm cover is typically included within your hull and machinery policy, but it comes with its own deductible — separate from your standard deductible and applied per named storm event. The size of that deductible depends on where your vessel is during hurricane season, your hurricane plan, and whether you have a lay-up arrangement in place. It is not a separate policy you buy; it is a condition and a deductible structure within your existing H&M cover. Review the named storm deductible clause carefully at renewal — it is one of the most financially significant terms in your policy.

What happens if I take a charter booking before my charter endorsement is in place?

If a claim arises during a paid charter and your policy is written on a private pleasure basis, your underwriter has grounds to deny coverage. The endorsement needs to be in place before the charter commences, not applied for after an incident. Bring your charter contract to your broker as soon as it is signed so the endorsement can be arranged and the underwriter can confirm that your P&I limits meet the contract requirements.

My captain handles the vessel full-time. Does that affect my P&I cover?

Yes, materially. A professional captain is a crew member, and crew injury and illness is a P&I exposure. Under MLC 2006, if your vessel meets the size and commercial use thresholds, you have mandatory financial security obligations for crew repatriation, wages in abandonment, and death or disability compensation. Even below those thresholds, your captain's employment contract creates obligations that your P&I cover needs to address. Provide your broker with the captain's contract, license, and sea service record — underwriters price and condition crew cover based on that information.

How far in advance do I need to notify my broker if I'm cruising to the Bahamas or the Caribbean?

If the Bahamas and the Caribbean are already within your navigation warranty, no advance notice is required for routine cruising within those limits. If you are planning to go beyond your current navigation limits — further south in the Caribbean, to Central America, or across the Atlantic — notify your broker before you depart. Navigation warranty breaches, even unintentional ones, can void a claim. For extended passages or transits through any Joint War Committee listed area, the extension needs to be in place before you leave the dock.

What does my underwriter need to see to approve my hurricane plan?

A credible hurricane plan names a specific individual responsible for moving the vessel, identifies the destination (a named marina, boatyard, or hurricane hole), sets a defined trigger — typically a specified number of hours before projected landfall — and documents how the plan is activated if the captain is not aboard. Underwriters also want to know whether the vessel will be hauled or remain in the water, and whether the destination facility has a track record of surviving named storms. A plan that says 'we will move the boat if needed' is not sufficient and may result in your named storm cover being conditioned or your deductible being increased.

Does my policy cover the tender and water toys?

Only if they are specifically scheduled. Tenders, jet skis, paddleboards, dive equipment, and other water toys are not automatically included in your hull and machinery cover. Each item needs to be listed with an agreed value. If a tender is lost or damaged and it is not on the schedule, the claim will be declined. When you submit your vessel particulars, include a complete inventory of all tenders and toys with replacement values — your broker will ensure they are properly scheduled.