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Grounded yacht looted - can claim under the insurance policy?

Updated: Apr 2, 2022

The Creola [2019], a case of a grounded yacht focused on some interesting aspects of marine insurance law. After being abandoned, it was looted by locals. Later salvors & a security firm were engaged. Owner claimed under the insurance policy for the damage done, theft and S&L expenses. Claim amount was not being paid and proceedings were issued against the insurer’s agents in UK.

Insurers contended that C-maps system and nav charts were outdated. Court found otherwise. Damage done by assured’s negligence was excluded but insurers failed in proving it. Next issue was whether damage caused by water was perils of the seas, piracy, theft or malicious acts, all of which were insured perils. Water had entered from broken windows and unbattened hatches, both resulting from looting. Court held it not to be piracy, as there was no use of force against the crew. Malicious act and theft were also ruled out. Proximate cause of damage was peril of the seas, which was recoverable. Salvage expenses were recoverable under S&L.

IISTL in its blog has doubted the court's reasoning (and rightly so) on issues like proximate cause, piracy and appln of a clause excluding claims for negligence of assured where it is an individual. Those interested can read it here

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