Club Organized Sailing, Insurance and the use of Non Coded Boats

Club News, Sailing Trips | November 14th, 2011 | 1 Comment

Posted by: David Walker

During the past couple of years many questions have been asked regarding the level of cover provided by the club’s liability insurance policy.  In an attempt to answer this and other insurance related questions members of Bromsgrove Boaters committee embarked upon a large piece of work which perhaps unsurprisingly raised more questions than it answered. 

This article is aimed to inform the reader of the many issues surrounding the use of non coded boats for club organized sailing activities so that you may better understand why as a club we are no longer able to arrange sailing on privately owned non coded boats. 

On Liability insurance held by Bromsgrove Boaters strictly I am prohibited within the terms of our policy to summarise or comment on cover provided. In spite of this I am prepared as a non professional to offer my opinion on certain areas of cover in an aim to satisfy questions asked from within the membership of Bromsgrove Boaters.  Any opinion offered below will be as a result of having read the relevant sections of our insurance policy as well as having asked specific questions to our insurance broker. 

It should be borne in mind that the officers of the club felt it necessary to guard against errors & omissions during club organized activities and that the annual cost per member for liability insurance represents approximately £2.00 per head.  It should be assumed therefore that any cover provided by the policy will only satisfy a minimum requirement.  Members are strongly advised to seek advice from an insurance expert and arrange for suitable insurance cover to satisfy their own insurance requirements.


Insurance related questions asked by members of Bromsgrove Boaters 

Q.  Is liability insurance cover provided to members whilst sailing i.e. not just the skipper 

A.  It appears that the policy includes member to member cover which is obviously better than only protecting the skipper whilst acting as an officer of the club.  In order to benefit from any insurance cover provided you must be a member of Bromsgrove Boaters and the voyage must be recognised in the club events calendar.

Q.  Is insurance provided for other club activities i.e. non sailing?

 A.  Cover is provided for other club activities such as our monthly meetings as well as other club organized social events.  Once again in order to benefit from the cover provided the event needs to be recognized in our events calendar and should be of benefit to club members 

Q.  If I charter a boat in the Mediterranean and take my friends and family sailing will I be covered by the club’s insurance policy?

 A.  In spite of conflicting information received from our insurer it appears that liability cover may exist during club organized sailing activities outside of UK waters.  It is important to note that this is only likely to be the case on activities such as Bromsgrove Boaters organized Mediterranean flotillas where all persons on board are members of Bromsgrove Boaters. 

If a group of members go off on their own accord and a claim is made against them for a negligent act either within or outside UK waters then no cover will be in force due to the fact that the trip is not a recognised club event.

Q.  If as a boat owner taking other members sailing on my own boat, do I have the luxury of cover provided by the clubs insurance policy? 

A.  The answer to this question is somewhat ambiguous and may be seen to contradict some of what has been stated above.  Put simply the civil liability policy might provide protection to the members and the boat owning member, although again in order for cover to be in place the cruise needs to be recognised in the club events calendar and be for the benefit of club members.  Where the issue of using non coded boats for club organised sailing becomes complicated is when we define how the cruise is being paid for which determines whether the cruise is seen to be sailing for pleasure or a commercial activity?  Please see below for definitions of commercial sailing together with the laws governing such an activity

The use of Non Coded Boats

Traditionally Bromsgrove Boaters has organised sailing weekends as well as longer cruises throughout the year.  The policy of the club has always been to provide affordable sailing on a not for profit basis usually organised by the club’s cruising secretary with the full support of the club committee.  It has been common practice to use charter boats from well established yacht charter companies at various locations around the UK.   Members have also benefited enormously from the use of privately owned boats within the club whose owners have been prepared to offer sailing opportunities.

In researching the level of insurance cover provided during club organised sailing activities it was not long before we had to define sailing for pleasure or sailing commercially.

The ruling on this comes from the Maritime and Coastguard Agency (MCA) who in general terms define it as follows

  • Any vessel carrying passengers for hire & reward must be coded
  • A vessel is considered to be operating commercially when any monies received by the boat owner / skipper exceed the direct costs incurred during the duration of the voyage. 
  • Direct costs consist of moorings, food, diesel used.  They do not include depreciation, wear & tear annual berthing costs etc.  It is assumed that the total cost of direct expenses incurred may be divided between all on board including the owner / skipper

We became highly concerned that as a club that we have been allocating berths on privately owned boats which were not necessarily coded, and that monies paid to the boat owner exceeded the direct costs incurred.

As an affiliated club to the RYA we sought an opinion from their legal department, and have been horrified by their response. 

Firstly they confirm the definition of a boat operating commercially in great detail

We asked what the consequences would be together with the club’s exposure should a non coded boat put to sea when according to the definitions above, that boat should in fact be coded

Answer from the RYA

I think it is important to distinguish between criminal and civil liability.  If a boat puts to sea uncoded when it should be coded, both the owner and skipper are committing a criminal offence under the 1998 Regs. I do not believe, however, that the club would have any exposure in this regard.

On the civil side, if the club arranges voyages on uncoded yachts that should be coded then it might be exposed to liability should there be an incident. However, a club is not vicariously liable for the actions of its members so if the club makes it clear that only payment for direct expenses is permitted then I doubt that the club would be found liable in the event that the owner/skipper disregards the club’s advice, even if the club knows that the owner/skipper receives greater payments, providing that the club is not arranging the voyage

Other Questions and Answers between Bromsgrove Boaters and the RYA

Q.  We are aware that other clubs have found solutions to this issue and we would like to know whether you feel that their solutions are viable. We don’t want to wait until an accident occurs to find out that we have been contravening the law and the officers of the club, in particular are concerned about their liability. We do have insurance, which is basically an ‘errors and omissions’ policy and we are also talking to them to understand their requirements.

A.  As regards the coding point, we do not believe that the other clubs have actually “found solutions” – they have constructed arrangements that we are sure a court would find no difficulty in dismantling on the basis that they are simply a sham to avoid the regulations.  If the yacht to be used in the excursion is privately owned then the owner cannot receive any money over and above the direct operating expenses of the yacht incurred during the voyage i.e. fuel, food, overnight marina fees etc. but not maintenance, wear and tear, permanent mooring, insurance etc.  Equally, users of the vessel may not make any other payments in connection with the use of the yacht – so the users cannot pay the club for the use of a member’s private yacht.

Q. We are concerned that, should an accident occur, either the club or the boat owner may be found to be contravening the law for taking fare paying passengers on non coded boats. We want to understand what level of payment members can make, to a boat owning member without contravening the law, by being deemed a ‘commercial’ transaction. We appreciate that this payment should only be for direct expenses incurred on the trip completed, but this does not give the boat owner any contribution towards his maintenance, wear and tear, mooring and other costs, which are significant.

A.   I have discussed the matter with the Legal Manager here, and advise as follows:

 The MGN 280 definition of Pleasure Vessel (a)(ii)(bb) requires the voyage or excursion to be free – i.e. in which “no money is paid, and no goods or services are provided, by any person”; however this definition does not apply as strictly speaking the law regulating coding is contained within the Merchant Shipping (Vessels in Commercial Use for Sport and Pleasure) Regulation 1998, which require that “no other [i.e. other than direct expenses] payments are made by or on behalf of users of the vessel”.  It is worthwhile noting that it is intended for MGN 280 to apply and whilst the Notice has been published and is often used, it does not yet have the force of law.

 The MCA has confirmed that “on the issue of contributing to the direct costs of the voyage, we have in the past been advised by our Departmental lawyers from the Department of Transport,  that direct costs can only be assessed at the end of the voyage when it is established what they are.  This does not prevent an upfront “kitty” that may well be a best estimate that is either replenished as the trip progresses or the remains divided at the completion of the voyage.  How, when and how much contribution is made can often clearly indicate whether the undertaking is commercial or pleasure, it is however only part of the full equation.”

 If the club has “paid the skipper/owner a similar amount to that which has been paid to the charter companies” then the owner is making money out of the transaction and it is a commercial operation.

 The money side is set out in the 1998 Regs so there isn’t really any room for manoeuvre around that; if the club wishes to avoid the necessity of comply with the coding requirements the owner of the yacht to be used cannot receive any money over and above the direct operating expenses of the yacht incurred during the voyage (as detailed above).  I am afraid that if the owner is to receive more than the ‘direct operating expenses incurred during the voyage’ the boat is going to have to be coded


As a well established and respected cruising club it is vital that we conduct our affairs responsibly conforming to legislation as well as UK Law where appropriate. 

I hope that it is obvious to all who have read and understood the information above, that as a club organizing sailing opportunities for its members we are only able to deal with reputable established charter companies whose boats are known to be fully coded in line with current regulations.  For any club member wishing to take advantage of club organized sailing this does of course provide some comfort in the  knowledge that all boats chartered conform to minimum safety standards, and that all life saving equipment is appropriate for the size of boat being chartered and in date.

Within Bromsgrove Boaters there are a number of boat owning members who inevitably from time to time offer crewing opportunities to other club members.  As a cruising club we are delighted that such sailing opportunities exist throughout the season but feel it important that any person participating should be aware of the above information especially in circumstances where the boat is not currently coded. 

We do recognize that most if not all privately owned non coded boats are often maintained to the highest standard and often carry safety equipment in excess of the requirements of a coded boat.  Any club member fortunate enough to be offered a crewing opportunity should not be discouraged from accepting.


David Walker

Commodore Bromsgrove Boaters

November 2011


One Response

  1. keith bambury says:

    It seems a pity that club members may not use other members privately owned boats.
    I have had some great sailing experiences in the past with private owners who have made their boats avaliable to us and as far as I can recollect they have not charged anything for this other than a share of the direct costs.
    It seems the only way to comply is to pre calculate the expected direct costs and have it in a “kitty” with all the accrued direct costs compiled at the end of the voyage and divided equally between all persons on board

    I am not able to attend any meetins as I live so far away now but do get some info from the clib newsletters and my contact with some members

    I take this opportunity to wish all members of this great “sailing” club a very merry christmas and a happy, healthy and prosperous new year

    GO SAIL IN 2012

    best regards

    Keith Bambury

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