Your boat, whether it's a transport barge, a canal boat or a tourist cruiser, is much more than just a means of transport. It's often a major investment, or even your main working tool. Protecting it from the hazards of inland navigation - collision, fire or collision with a structure - is therefore fundamental. This is precisely the purpose of hull insurance for inland waterway vessels.
Closely modelled on its marine counterpart, this insurance policy is specifically designed to cover material damage to the boat itself, but also includes a third-party liability element. Understanding how it works and what it covers, as well as its limits and exclusions, is essential for any owner or operator. This article guides you through the intricacies of inland waterway hull insurance, to help you make the wisest choices for protecting your floating capital.
What does inland waterway hull insurance cover?
The "body" policy is primarily intended to cover the financial consequences of accidental events that may affect your boat. It combines damage insurance (for the boat itself) and limited liability insurance (for certain damage caused to third parties).
Main cover: property damage and loss
The core of the hull policy is cover for direct material damage to the insured vessel. According to standard policy wording, this includes damage and loss resulting from "any shipping accident, explosion, fire or any event of force majeure". This covers a wide range of incidents:
- The consequences of an accidental grounding.
- Damage following a collision with another boat or a collision with a quay, lock or bridge...
- Damage caused by fire or explosion on board.
- Damage caused by sudden and unforeseeable climatic events comparable to force majeure.
What exactly is covered? The main items covered are body of the boat (hull, structure), of its motor units and its dependencies (everything attached to it or used in its service). Depending on the contracts and options chosen, cover may be extended, under certain conditions, to special equipment installed on board (cranes, specific navigation equipment...) and even at the furniture.
A share of civil liability included
In addition to cover for damage to your own boat, basic hull insurance generally includes cover for certain claims that third parties may make against you following an accident involving your boat. However, this liability cover is limited to specific cases:
- Boarding or collision : The insurance covers the compensation you may have to pay if your boat collides with another inland waterway vessel, a seagoing vessel or any other floating unit, or if it strikes a property or installation (quay, lock, etc.), causing material damage to these third parties.
- Immobilisation indemnities : If the collision or striking causes damage to property or installations belonging to a third party, the insurance may cover the compensation claimed for the immobilisation of this property while it is being repaired. Imagine the cost if your boat damages a lock gate and blocks navigation!
- Contribution to general average : In the rare cases where the law applicable to transport (often that of the country of loading) makes it possible to declare a general average situation in river transport (which is exceptional under French law), the contribution requested from your boat could be covered by the insurer.
It is important to understand that the liability cover included in the "body" policy is limited. It does not cover all the damage your boat may cause. Extended warranties are often required for full protection (see below).
The special case of retirement costs
Imagine that your boat sinks as a result of an insured loss. If the competent authorities require you to remove it from the seabed (for example, because it constitutes an obstacle to navigation or a pollution risk), the costs incurred in this complex and costly operation may be covered by the hull policy. Please note, however, that this cover generally requires the insurer's prior agreement.
How is the insured value determined?
The extent of compensation will depend on the value for which your boat is insured. This "insured value" is set out in the specific terms and conditions of your policy. It may be :
- Either a approved value You and the insurer agree on a lump-sum value when you take out the policy. In the event of a total loss, this is the sum that will be paid out (provided it is not manifestly overvalued).
- Either based on real value of the boat on the day of the loss.
Policies generally detail the items included in the calculation of this value: the hull, superstructures, rudder, engines, as well as equipment such as radio and telephone sets, even vehicles belonging to the insured or the crew, furniture and personal effects (within certain limits).
An important technical point: cover is often separate for the body/engine, special equipment and furniture. In the event of a claim, the capital provided for one category cannot be used to make up for a shortfall in another category if the damage exceeds the capital allocated to the latter (principle of non-reversibility).
Situations and risks not covered by the "body" policy
Like all insuranceThe "body" policy has its share of exclusions. It's vital to be aware of them to avoid unpleasant surprises.
General exclusions (brief reminder)
In a previous article, we looked at the exclusions common to most river insurance policies: navigation outside authorised areas, intentional or inexcusable fault on the part of the insured party, acts of war or terrorism (generally outside France), nuclear risks, illegal activities, etc. These exclusions naturally apply to the 'hull' policy.
Exclusions specific to "body" insurance
In addition to the general exclusions, the "body" policy excludes certain specific risks or damage linked to the condition or use of the boat:
- Faulty or inadequate securing : If a claim arises because the cargo or equipment on board was improperly stowed, the insurance may not apply.
- Undeclared presence at the bottom of the water : If your boat sinks and you do not report it promptly to the insurer and the authorities, cover may be refused.
- Defects, normal wear and tear, obsolescence : The insurance covers accidents, not normal deterioration due to the passage of time or to an intrinsic defect in the insured item. If a part breaks due to simple wear and tear, this is not a covered loss.
- Lack of maintenance : This is a frequent exclusion, and sometimes a source of disputes. The insurer can refuse cover if it can prove that the loss was due to a clear lack of maintenance on your part. However, the burden of proof lies with the insurer. Case law (Cour de cassation, 5 April 2016), for example, held that the rupture of a water pipe due to frost, even though it caused the boat to sink, was not sufficient to prove a lack of maintenance, as it had occurred during an exceptional and unusual cold snap.
- Failure to comply with the manufacturer's instructions : If you do not follow the manufacturer's technical recommendations for use or maintenance, and a claim results, the guarantee may be invalidated.
- Navigation prohibited: The insurance does not cover you if you are sailing when navigation is officially suspended (for example, for works), or when conditions are too dangerous (flooding reaching the highest navigable water level, presence of ice before the icebreaker passes).
- Driving under the influence of alcohol : An accident occurring while the driver is clearly drunk will generally be excluded from cover.
Recourse from third parties explicitly excluded
It is important to understand the limits of the civil liability cover included in the basic "body" policy. It does not cover not :
- Damage to goods carried by your insured vessel. To achieve this, you need specific "facultés" insurance (for the owner of the goods) or the carrier's contractual liability insurance.
- Your contractual liability vis-à-vis third parties for pollution damage (except that resulting directly from a collision covered by the policy). For example, a slow leak of fuel due to obsolescence would not be covered.
- The cost of bailout or assistance if your boat runs aground in conditions considered normal for navigation (for example, temporary grounding due to the tide in an estuary area).
The specific obligations of the "body" insured
In addition to the general obligations (declaring the initial risk, paying the premium, etc.), the hull policy imposes a number of specific duties on the boat owner:
- Declaring changes : You must inform your insurer of any major modification to the boat, such as a change to the hull or replacement of the engine. These changes may alter the risk and require an adjustment to the policy.
- Declaring mortgages : If your boat is subject to a mortgage (i.e. if the boat is used as collateral for a loan), you must inform the insurer, either when you take out the policy or if the mortgage is taken out during the term of the policy. This information is deemed relevant by the insurer in assessing the risk (see the case law cited in the previous article).
Adapting your cover: possible additional clauses
The basic 'body' policy provides essential cover, but is often insufficient for comprehensive protection. Fortunately, insurers generally offer a range of additional clauses to extend or complete cover. Here are some common examples:
- Freight guarantee : Covers the loss of transport income (freight) if a covered loss interrupts the journey.
- Cargo removal costs : Reimburses the costs incurred to remove cargo if it is abandoned following an insured loss.
- Lightening / Routing : Assumes the costs of transhipment and re-routing the cargo to its destination if the journey is interrupted.
- Vehicle on board : Covers material damage to the insured's personal motor vehicle while the insured is on board or loading/unloading.
- Electrical damage : Extends cover to damage to on-board electrical installations (excluding sailing accidents), often with an obsolescence factor applied.
- Machine breakdown : Guarantees, according to precise rules, the accidental breakage of internal parts of propulsion engines.
- Civil liability extensions : They are very important, covering third-party claims not included in the base:
- Recourse for property damage other than collision.
- Pollution claims (even without collision).
- Recourse for bodily injury caused to third parties.
- Passenger recourse (property damage and personal injury).
- Loading and unloading risks : Covers damage caused to the boat by handling equipment during these operations.
The choice of these clauses will depend on your activity and the level of risk you are prepared to assume. It is strongly recommended that you discuss these options with your insurer or an advisor.
When does the insurance cover kick in? The duration of the guarantee
The "hull" policy covers your boat while it is at sea, but not only that. Cover generally remains in place when the boat is :
- In dry dock, on a fairing grill or slipway for maintenance or repair.
- During dewatering, lifting or re-launching operations.
Cover is also maintained if your boat provides assistance to another boat in difficulty. Please note, however, that damage sustained by your own boat during this assistance will only be covered if you are unable to obtain reimbursement from the owner of the assisted boat. The same applies if you help another boat get through a difficult passage, provided that the third party assisted waives any recourse against you.
However, the guarantee is generally suspended when the boat is engaged in commercial pushing or towing operations (unless these activities are specifically declared and covered by the contract).
A practical point: if your policy expires while your boat is being repaired following an insured claim, or if it is on a voyage and suffers insured damage, cover is automatically extended until the end of the repairs or voyage, subject to payment of a daily premium surcharge.
What to do in the event of a claim affecting the boat?
When an accident occurs, responsiveness and compliance with the procedure are essential if you are to obtain compensation.
Declaring a claim: acting quickly
This is the first stage: you must report the claim to your insurer. as soon as you are aware of it. This initial information (often by telephone) must be confirmed by writes (registered letter recommended) within a very short timeframe, generally five days at the latest. Failure to meet this deadline may result in a reduction in compensation, or even forfeiture of cover if the delay has caused damage to the insurer.
You should also make sure that all your on-board documents are in order. Case law (Cour de cassation, 23 October 2019) has recalled that if the policy excludes cover if the papers are not in order, the insurer cannot invoke this clause if the sailing permit was administratively valid at the time of the claim, even if it had been extended exceptionally.
Assessing the damage
To assess the damage, a contradictory expertise is organised. The insurer appoints an expert, and you have the right to appoint one yourself (at your own expense unless otherwise stipulated). The expert appraisal must normally take place within ninety days following the damage. Its aim is to determine the cause, nature and extent of the damage, and to put a figure on the cost of the repairs needed to make the boat seaworthy again.
A special feature of inland waterway hull policies is the obligation on the insured to arrange for without delay repairs approved by the expert. If the work is not undertaken within a period often set at three months after the event (even for reasons beyond your control), the compensation paid by the insurer may be capped at the amount that would have been due if the repairs had been carried out within that period.
Calculating compensation: rules and limits
The compensation paid by the insurer is based on the cost of replacements and repairs deemed necessary by the surveyor. Please note that you cannot generally claim additional compensation for the depreciation of the boat following the loss, or for operating losses during immobilisation (unemployment), unless specific cover has been taken out. Nor are the costs of wages and food for the crew during repairs covered.
A franchiseYou are responsible for the cost of each event, the amount of which is set out in your policy (except in the event of total loss or accepted surrender).
The insurer has several settlement options:
- He may require repairs to be carried out by tender, failing which the compensation will be reduced (often by 25%).
- They can choose to have any damaged items repaired themselves.
- It can reimburse you for their value at the time of the loss, after deduction of the salvage value ("damaged" value).
- It can replace a damaged or lost item with an equivalent second-hand one.
Don't forget that you will need to justify the insured value of your boat. If, on the day of the claim, this insured value is lower than the actual value, the insurer will apply the proportional capital rule and will reduce the indemnity by the same proportion (indemnity principle).
The abandonment option: abandoning the boat to the insurer
In the most serious cases, the policyholder can choose to 'abandon' his or her boat, i.e. transfer it to the insurer in exchange for payment of the indemnity provided for a total loss. This option, inherited from maritime law, is only possible on inland waterways under very strict conditions:
- Proven total loss of the boat.
- Technically impossible to repair.
- Cost of repairs (including any salvage costs) up to or exceeding the insured value.
If you find yourself in one of these situations, you must notify the insurer of your decision to surrender the vehicle within three months following the event. The insurer then has thirty days to choose: either he accepts the relinquishment (and becomes the owner of the wreck), or he refuses the transfer of ownership but still pays you compensation for total loss.
Hull insurance is the essential basic protection for your river boat. Its structure, extensive cover and numerous exclusions and options make it a complex contract. Careful analysis of your specific needs and the conditions offered is necessary to ensure adequate cover.
Hull insurance is essential but complex, with many options and exclusions. For optimum cover for your river boat, personalised advice is essential. Contact our firm to assess your needs.
Sources
- Insurance Code (in particular articles L. 174-1 to L. 174-3)
- French hull insurance policy for inland waterway vessels (general principles derived from standard forms)
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