A simple math test:

     You cause $200,000 worth of damage to your chartered yacht. The yacht owner’s insurance policy deductible is $25,000. What is your total financial exposure?

     This is one among many questions that Gary Carroll of Comprehensive Yacht Assurance put to a room full of about 60 charter brokers at last week's meeting of the American Yacht Charter Association in Newport, Rhode Island. The AYCA boasts what are arguably the strictest professional association codes in the industry, with brokers being required to have at least seven years' experience before becoming members. The average AYCA member has 22 years of experience as a charter broker.

     Even still, when Carroll asked his $200,000 financial exposure question, several brokers offered different responses. Some said that you, the charter client, would be responsible for $25,000. Some said zero. Some said the entire $200,000.

      Apparently, the way many standard yacht charter contracts are worded has created confusion in this area. That's why the AYCA asked Carroll to further educate its members, and why the group invited me to sit in on his presentation--to help educate charter clients like you.

      The answer to the question, by the way, is that you would be on the hook for the entire $200,000. That's not something you want to find out after you've gotten on the yacht, as opposed to when you're filling out the pre-vacation paperwork.

     To understand why you would be liable, and to learn how to protect yourself financially when booking your next charter, check out this new, exclusive charter liability report in the Helpful Articles section of CharterWave.

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