Ship and yacht repairers play a crucial role in keeping the marine industry running smoothly. Their expertise and hard work ensure vessels remain in top condition. Given the risks they face daily, it is crucial for them to have the appropriate insurance protection. Conor Hayes, Sales Director at MHG Insurance and a specialist in marine liability coverage, joins us for a Q&A session dedicated entirely to the unique insurance needs of ship and yacht repairers.

With over 20 years of experience, Conor has held senior brokerage roles in London, the Cayman Islands, and South Florida. Conor helps businesses navigate complex insurance challenges with confidence, ensuring they have the right coverage to protect their operations and assets.

Let’s get started!

Q: With your extensive industry experience, how have liability insurance requirements for repairers evolved over the years?

Matching the changes in the industry, the risks assumed by repairers have become more extensive and more complex.

Q: How have liability risks for ship and yacht repairers changed over the past decade?

As marine technology has evolved, the work itself, of many classes of ship repairers , has become more sophisticated, more complex, thereby increasing the need for qualified crew and a heightened need for training.

Increasing complexity often leads to increased probability of error. More stringent contractual requirements imposed upon repairers in their agreements with vessel owners and managers have shifted risk of loss to repairers.

With this in mind, it’s important to keep close contact with your insurance provider, who can also guide you in understanding what your policy covers, and what is not covered.

Q: What emerging risks should repairers be aware of in today’s marine industry?

Again, it is the increasing complexity and sometimes conflicting demands of the ship owners that create almost an impasse for the companies that are being hired to repair the vessels. For example, many cruise lines tend to issue a rather generic list of insurance requirements that are not always applicable to the operations of the vendor that is applying to do the work. We often see requests to carry domestic Workers Compensation and Commercial Auto Liability, which does not make much sense when the repairer is undertaking a project in foreign territories such as Singapore and Australia.

What key industry trends are shaping marine insurance, and how might they impact repairers?

For the first time in many years, there are signs that underwriters are starting to become somewhat more forgiving in terms of rating. Whether this is a trend that will play out over time remains to be seen. The global pandemic of 2020 did a number on the ship repair industry, particularly anything related to the cruise lines, but this niche sector has begun to show signs of recovery.

I consider it part of my job to stay on top of emerging trends like this so that my clients don’t miss anything.

What common gaps do you see in repairers’ insurance coverage, and how can they avoid them?

When coverage falls short, it is usually due to one or more liabilities assumed under contract by a repairer not being properly addressed in the policies maintained by the repairer.

When working across different global regions, what should repairers look for in their insurance policies to ensure compliance?

The marine industry operates on a global scale, and while many aspects of ship repair, such as propulsion systems and electronic equipment, remain consistent across regions, insurance requirements can vary. One crucial factor to consider is policy territory. If a loss happens anywhere in the world, the policy must have coverage in that location. Ensuring worldwide coverage helps repairers stay protected no matter where their work takes them.

Beyond standard liability coverage, what additional insurance policies do you recommend for ship and yacht repairers?

It really depends on the nature and scope of operations. Most ship or yacht repairers require the basics: Marine General Liability that is endorsed with coverage for Ship Repairers Legal Liability (SRLL) and Maritime Workers Compensation (USL&H) if they have employees working on or adjacent the navigable waters of the U.S.

That said, there are other situations that come into play and are highly individual. For example, what if the shipyard or marina require higher limits of liability? That is when a Bumbershoot Liability policy comes into play.

Do they own vehicles? If so, Commercial Auto Liability is a necessity.

Are there any employees working aboard vessels in navigation? The insurance solution for this is Marine Employers Liability.

There are a multitude of different factors and contingencies to consider, which is why it is imperative to consult with a proven marine insurance specialist.

Are there specific endorsements or policy enhancements that repairers should consider for added protection?

The requirements of repairers vary from one entity to the next. It is not necessarily a case of your insurance broker having a ready-made list of “standard endorsements,” as it is the person you rely on who has a consistent, organized approach to their work. For example, for coverage to be in place under a Marine General Liability policy, the central form in a repairer’s portfolio, any claims must arise from the negligence of the insured, its subcontractors, or its employees.

Today, it is not uncommon for the laborer performing the work of the repairer not to be subcontractors or employees in the traditional sense. It is a problem that can be addressed, often easily. Still, the repairer’s insurance representative must have the expertise to address it. 

What are the biggest factors that impact the cost of liability insurance for repairers?

Simply put, it is the class of work and the insured’s loss record. The more hazardous a risk is assumed to be, the higher the rate. The cleaner the loss record, the lower the rate tends to be.

What proactive steps can repairers take to minimize their liability exposure and strengthen their risk management strategies?

Review all written contracts closely and continuously train employees in best practices.

In your opinion, what sets MHG Insurance apart from other marine insurance brokers?

This one is straightforward: proven expertise.

MHG has been a market leader in the marine insurance industry for well over three decades. We are not ‘generalist insurance experts’ and nor do we ever wish to be perceived as such. We continue to capitalize on the mistakes of other brokers who masquerade as marine insurance specialists but are actually not. All it takes is a quick review of the policies put in place to determine whether the competitor knows what they are doing.

Navigating the complexities of liability insurance for ship and yacht repairers requires expertise and the right coverage. Whether you're reviewing your current policies or seeking guidance on emerging risks, working with a specialist can make all the difference.

For expert advice and tailored marine insurance solutions, visit MHG Insurance or call us today. Let’s ensure your business stays protected.