London-based The Shipowners’ Club has launched a policy for its high net worth super yacht client base to indemnify them against Seafarers Unpaid Wages Following Abandonment (SUWFA), which the bulletin indicated was “its latest response to specific market demand for insurance cover not formerly available.”
The Club said it “believes the SUWFA cover will be welcomed by specialist marine brokers as well as those general brokers with super-yacht operating or owner clients. Its introduction, in response to market demand, nullifies the uncertainty arising from the Maritime Labor Convention 2006 (MLC) stipulation for vessel owners to provide assurances of ‘financial security’ and leaving them liable for any unpaid wages owed to the crew.”
The announcement explained, that “although some 80 percent of the world’s gross tonnage of shipping has been signed up to the Maritime Labor Convention 2006 (MLC), the convention has left many unsure as to the extent and applicability of some of its provisions. Crucially, this uncertainty includes the Convention’s requirement for ‘financial security’ (in practice, compulsory insurance) to be guaranteed by the vessel owner, leaving them liable for any unpaid wages owed to the crew.”
The Shipowners’ policy “covers the cost of repatriating the crew and paying their back wages or indeed the contractual severance pay which may be due under the standard employment agreement or crew contract. Prices are fixed with reference only to the number of crew and the total vessel payroll.”
Ian Ferns, Business Development Manager, explained the Club’s reasoning in introducing the cover: “We have noted that the issue of whether unpaid wages are in need of cover continues to divide opinion. While we agree with our fellow International Group members that such cover is yet to be mandatory, we have been inundated with requests from brokers to provide it. Regardless of whether the requirement exists, the fact remains that our yacht-owning Members are faced with this request as a contractual condition on a daily basis. We have therefore decided to assist.”
The Shipowners’ product “responds specifically to abandonment.” Ferns said: “Rather than being triggered by insolvency, which is the norm used by other products, as soon as the crew detect that their employer may be failing in its duty to meet their agreed wage payments, the Club can be called upon to act. The declaration of the employer’s insolvency may, of course follow long after the crew has been abandoned. Their need is for immediate help.”
The SUWFA policy is the latest initiative taken by Shipowners’ to respond to the particular demands of the super yacht sector and follows the Club’s first move to distil P&I Club liability cover into a neat, jargon free policy document. Launched in 2011, the ‘all risks’, plain language yacht policy has proved a great success.
Source: The Shipowners’ Club
Topics New Markets
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