Home News Residential Conveyancing Owner of Grounded Luxury Yacht Scores Victory in Insurance Dispute

Owner of Grounded Luxury Yacht Scores Victory in Insurance Dispute

Following accidents that result in property damage, it is by no means a given that insurers will agree to fund the cost of repairs without question. As a High Court case concerning a damaged luxury yacht showed, however, with the right legal advice there is no reason why they should always get their own way.

The 24-metre yacht was only six months old when her starboard engine snagged on debris and stalled. After running aground in the Bosporus Strait, she was able to limp to port despite damage to her hull, propellers, and highly sophisticated drive units that enabled her to attain speeds of up to 45 knots. An insurance policy covered her in respect of reasonable repair and replacement costs required to reinstate her as nearly as reasonably possible to her pre-accident condition.

Her owner claimed the whole of the actual cost of her repair from the insurers. However, they disputed the claim on the basis that more money had been spent on reinstating her than was reasonable. In particular, they asserted that there had been no need to return the drive units to their Italian manufacturer for repair and that they could have been fixed far more cheaply at a local shipyard in Turkey.

After the owner launched proceedings, the Court found that the vast majority of the repair costs had been reasonably incurred. The drive units were specialised, computer-controlled pieces of proprietary equipment and it was reasonable to ship them to Italy for repair. It was also reasonable to replace, rather than repair, the damaged propellers.

In ruling the insurers liable to pay the owner more than 240,000 euros under the policy, the Court also rejected claims that a substantial part of the damage was caused prior to the grounding incident, or subsequently whilst the yacht was being sailed to the port where she was laid up.

19 February 2021
Last Updated
2 March 2021