Marine insurers providing boat and yacht insurance offer a wide range of coverage physical damage and liability. Accidental loss or damage to the boat and its machinery are covered by the physical damage section. This not only covers the hull and the engine(s), but also the sails, personal property, and other equipment on board that is required to operate the boat.
The liability section, sometimes referred to as Protection & Indemnity, covers the legal obligations to third parties. This legal liability can arise from bodily injury or loss of life, or loss to someone else’s property, as a result of the ownership or operation of the boat or yacht. Liability coverage also helps pay for the legal defense if you are sued for an occurrence that may be covered under the boat insurance policy.
The amount of damage to a boat that is covered under the policy is also dependent on how the policy treats depreciation. In some cases, the boat will have its value depreciated according to a set schedule, and the insurance policy will only pay up to the value that the boat is still worth. Additional coverage may be purchased by the policyholder that provides for a replacement boat if the boat is within a certain number of years old.