Never Let A Yacht Broker Sell You Insurance

Okay boys and girls, here’s a story called, “Great Lakes Reinsurance (UK) PLC v. Maria Arbos, et al. 2009 AMC 334 (S.D. Fla. 2009.)” Once upon a time Maria Arbos bought a 50’ Sea Ray from large yacht brokerage; her friend Mr. Quevedo paid for the vessel, and a yacht broker assisted Arbos with arranging marine insurance on the vessel. It gets better…
The yacht broker contacted the insurer and provided information to the insurer, such as naming Quevedo as an authorized operator who had not been involved in a marine loss for the past ten years; and also allegedly misrepresented the owner’s boating experience – all of this over a signature that may or may not have been the client’s.
Well kids, a year after the policy was issued the vessel disappeared. Shocking, eh? Arbos submitted a claim for the insured value of the vessel. Subsequently, Great Lakes discovered Quevedo previously owned a vessel that was reported stolen and that Arbos had no prior boating experience. Great Lakes denied the claims – a move upheld by the courts that ruled the representations about no prior losses and boating experience were material. Material misrepresentations are all an insurer needs to void coverage. Insurance company wins – client loses, again.
There’s a very good reason why insurance agents take mandatory insurance courses, pass insurance exams, pay thousands of dollars annually for E&O insurance and participate in mandatory insurance continuing education. What is that reason? Because we sell insurance – not boats. Unlicensed yacht brokers playing insurance agent is wrong on a number of levels; not the least of which is it’s illegal AND doesn’t serve the best interest of the client.
For more information on covering your assets and your clients’ assets (correctly and legally), contact Gary P. Carroll at CYA/Comprehensive Yacht Assurance at info@cyacht.net or 954.604.2888.