Getting your yacht ready for charter

May 30, 2017

Many owners consider chartering their private yacht to be a great opportunity to generate lucrative earnings with an asset that would otherwise lie untapped most of time. 

From an insurance point of view, generally an email or phone call to us should be enough to start the process. As chartering means an increase in risk, generally insurers will apply an additional or higher premium to your current policies in order to include the commercial activities. Here it is important to disclose the circumstances under which the charter activity will be carried out: bareboat or skippered, cruising area, deductible and number of guests will be key information the insurers will require to assess the risk and provide the new terms. 

Once the new conditions and premiums have been disclosed to and approved by the insured, the extension can be placed very quickly so as to not delay the charter activities. 

However, there are also other issues the yacht owner or operator will have to take into consideration. Here are a few questions owners and captains should ask themselves when it comes to chartering:

- Do I need to comply with any local requirements? 

In the Balearics, for example, owners need to obtain a local charter licence if they plan to board guests on the islands. Most regions in Spain will also require an additional accident policy. 

-      If skippered, do my crew have the necessary qualifications?

The qualifications required on commercial vessels are not necessarily the same as on private yachts. Make sure you comply with the flag state rules and any local requirements that may apply. 

-      Do I comply with labour regulations on commercial vessels? 

This depends on the flag state and the gross tonnage of the vessel. Most flag states have already ratified the Maritime Labour Convention 2006 and others, in addition, have national crew welfare regulations via social security schemes like in Germany or Spain.

-       Do I need a local tax representative?

By conducting business in a foreign country, local taxes and duties may fall due. Make sure you are aware of the implications before engaging in charter activities abroad. Here charter agents will be able to assist.

If you are insured with Pantaenius, you can rest assured that our dedicated staff has lots of experience with charter activities and will provide you with all the assistance you need.