Not only is Lloyd’s insuring many of the boats competing at Cowes Week, many enthusiastic sailors in the market will also be taking part in the regatta.
Lloyd’s underwriters and brokers will be among the 8,500 professional and amateur sailors competing at the week-long regatta, beginning 3 August. And while some will be sailing in their own boats, the Lloyd’s Yacht Club – which is celebrating its 75th anniversary this year – will be competing all week in the Lutine, Lloyd’s own 53ft Swan yacht.
A key part of the summer sporting calendar, the Cowes regatta attracts up to 1,000 competing yachts, including both classic and modern boats, from large ocean racing yachts to smaller classes like the Flying 15.
Risks are heightened when racing because yachts are often being pushed to their limits, explains Richard Power of specialist yacht insurance broker Fastnet Marine, which specialises in insuring racing boats, as well as providing cover from dinghies to super-yachts.
“Racing yachts are built for speed, and their construction specifications and materials reflect the need to save on weight,” explains Power, who is racing at Cowes in the Etchells Class. “Under racing conditions, yachts are pushed harder, which increases the risks of dismasting, keel damage and, in offshore racing, hull delamination,” he says.
High-value and high-tech
Advances in racing yacht design in recent years mean much faster boats, according to Keith Lovett of Haven Knox-Johnston, a trading name of Amlin Underwriting Services Ltd, a Lloyd’s service company specialising in yacht insurance.
Stripped down racing machines like the TP52 are high value and use expensive high-tech materials like carbon fibre, Kevlar and titanium for their masts and rigging, says Lovett, who has raced at Cowes in previous years and whose company will insure hundreds of boats taking part in this year’s event. Such yachts are the Formula One cars of sailing, and can easily cost in excess of £400,000 to buy.
Damage to the larger racing machines can be costly because parts are usually bespoke and replacements are not readily available. Their specialist construction also makes racing yachts more expensive to repair as only a few boatyards are able to cope with the repairs.
The main risks in Cowes Week are collision and grounding, as competitors deal with a crowded racecourse and strong tides, according to Power. However, the risks of collision, while still a major factor, have been reducing with improvements in technology – race organisers use computer software to plan races to keep classes apart.
Underwriters cover the risks of damage caused by vessels colliding during the heat of the race, explains Paul Miller of R&Q Marine.
“While accidents are rare, some of the larger ships racing at Cowes, such as the Volvo 70s and Mini Maxi, are valued in the millions of pounds.
“These machines are built to be raced and, when racing is close, the chances for breakage and collision are greater, but they are crewed by the cream of the sailing fraternity,” he says.
Degrees of risk
Standard yacht insurance can cover damage caused by racing, although competitors must disclose their intension to race to underwriters so they can properly assess the risk.
“If an owner tells us that they will be racing we will want to get a handle on it,” says Lovett. “We will need to know the basis of the racing – whether it is just a local club race or whether they will be competing in the challenging Fastnet race – as this changes the risk considerably,” he adds.
All competitors at Cowes are also required to purchase third party liability of at least £2m, although £3m is fairly standard for most policies.
Boat owners also buy insurance to cover professional racing crews, and although serious incidents are rare they do happen – the British Olympic sailor Andrew Simpson died in a tragic accident when a catamaran capsized during a training session earlier this year.
Professional crew members can earn as much as £3,000 per day, and this is reflected in the liability and personal accident cover that owners buy.