Why you need insurance! A True Story.

You never expect the worst case scenario or the unexpected to happen to you, but when(and if) it does, then you're going to wish that you were prepared for it. All companies look good when the sailing is smooth. You really see how a company operates when you have to deal with problems. I've had 3 companies that I've stopped working with because they showed their true colors when the chips were down!

This is a true story and we are in the midst of it, so I'm leaving the name of the yacht company out, for now, but you can contact me privately if you want more information.

July 2010- Mykonos Greece

Brian and his new wife were going to spend their honeymoon sailing for two weeks in The Cycades Islands in Greece. The paid in advance, hired BJ as their skipper and chartered a 38 foot Lagoon Catamaran for the two of them.

The first few days were uneventful(although wonderful!) but that changed very quickly! They were docked at the government dock in Mykonos when the High Speed Ferry came in and docked at a different location. Normally it was further down the down, but for some reason the Port Police had them dock closer to where the yachts were docked.

The High Speed sent a huge wave down the dock towards the yachts and force of the enormous wave ripped off the cleat and separated the superstructure from the hull.

BJ followed all the procedures- contacted the Port Authority and filed a report. Next he contacted the charter company who is managing the yacht for it's owner. Everything seemed ok for a day or two with BJ and Brian thinking that the charter would go on as planned.

The next day the owner of the yacht(not the company that was managing the yacht) contacted BJ and told him that the charter was over and that the yacht would have to be returned to Athens for repairs. As for Brian, the owner told them that if they wanted to continue then they would have to pay for another yacht.

When I heard about the accident I called the charter company and they confirmed what I had heard. That the charter was over, Brian would have no money refunded and if he wanted to continue the charter he would have to pay for a new yacht.

He had left a damage deposit through the company which at the very least should have covered 2500 euro worth of damage, but the company was going to keep the damage deposit as well as the total rental fees for the two week charter and half the skipper's fees(they paid BJ only half of his fees and kept the other 980 euro for the second week).

Brian went through the contract and found the following clause… paragraph 11 states "should the yacht become an actual or constructive loss before or DURING the charter period, this agreement shall be deemed to be at an end and the charterer shall RECOVER from the owner ALL charter monies paid in advance to the owner only in the case the loss has occurred before the charter period, or during the charter period, provided that the charterer or his crew were not responsible for the loss".

I spoke with the base manager of the charter company and he agreed that the ferry was at fault and Brian should not be responsible. He said they had an attorney on the job who had successfully sued the ferry company in the past so he was optimistic that Brian would have his money recovered. We talked about the procedure and he told me that the Ferry Company and the Port Police work very closely together and that they would even "find" a witness to say what they need to have said to protect them.

I reiterated our point that clause 11 absolves Brian of all responsibility, he agreed but then he said that the money would have to come from the ferry company through the court.

A week or so later I sent another letter saying that Brian was very upset because they had not followed the agreement and I received the following reply…

Dear Mr. Econopouly,

Thank you for both your last e-mails, and apologize for this unpleasant situation.
Mr. Bibis is away from the office since last Thursday, for summer vacation, and for that reason I am taking the initiative to conclude this case, as due to legal implications repayment for Mr. Sarath's charter fee has taken a rather longer period than usual.

Indeed your client was entitled to this refund, as he was not responsible for the incident that has rendered his yacht out of operation, but before the final clearance from our legal advisors, charter fees had to be kept "suspended".

Please advise in which way we will settle this transaction. By wiring money to your account, or directly to your client's account ??
Please also note that we will handle you a document, by which, with this charter fee repayment everything is cleared from our side, and your client has no further claim,
which has to be signed by your client and kept by you, till the day we will wire the money back, after which it has to be send to our office.

Looking forward hearing from you regarding the all the above, please express to your client our deepest sympathy for his unfortunate situation.

Yours sincerely,

I sent the email to Brian and it looked like we were on the way to solving the problem, but the very next day I received the following email…

Dear David,

Further to our e-mail of yesterday, please be informed that we called today to our office the owner for the catamaran in order to claim the money paid for the charter of Mr. Sarath.
He came with his lawyer, refusing any such refund towards Mr. Sarath, both for the amounts of the charter fee, or the refundable deposit, claiming that indeed this term exists
in the signed contract (repayment of charter fee), but this is referred solely to systems on board leading to the yacht being rendered unusable.
According to their lawyer's argument, this is not our case, as the yacht has not malfunctioned in any aspect, and the problem/damages occurred by an outer source.
Given the fact that on a bareboat charter, the skipper/charterer are considered the "physical owners" of the yacht for the duration of their charter, they should bear the blame
for the final outcome, as they are responsible not only for navigational duties, but also for the general well-being of the yacht, even when birthed.
In view of the above, owner will keep money paid both for charter period and damages sustained on the yacht, and the charterer (Mr. Sarath) should address a legal inquiry
towards the ownership company of big catamaran that created this havoc, for their refund.

They have signed a document acknowledging possession of said amounts, and taking full responsibility against any legal action on behalf of Mr. Sarath, and left our office.

In view of the above developments, we are unable to proceed with any money transfer, as simply we have no money in our possession, regarding charter fees of client Mr. Sarath.

Looking forward hearing from you, regarding the above

Yours sincerely,

The charter company basically broke the contract with Brian and sided with the owner of the catamaran by agreeing to the owner's rewriting the contract and interpreting it to suit their needs(claiming that "indeed this term exists in the signed contract (repayment of charter fee), but this is referred solely to systems on board leading to the yacht being rendered unusable."- There is NO distinction in the contract about systems on board, the owner just added that in his meeting with the owner to try to bilk Brian out of his money- it WAS NOT in the contract).

Through subsequent conversations the base manager said that they had spoken to their attorneys and they claimed that the Port Police claimed that they had warned all the yachts about the new docking area of the High Speed Ferry and told them to tie off loosely from the pier and be on board when the ferry arrived. There are 3 things to remember about this statement. 1. BJ says the Port Police never came to warn him 2. This "warning' was never mentioned in the original report 3. Mention of the "warning" didn't appear until a month after the accident 4. The base manager said the Port Police and High Speed would do anything they could not to be found at fault)….. despite all those obvious facts, the charter company still would not support Brian, nor the legal contract they had between them.

We also talked about the amount of money that was going to be lost(8000 euro was what Brian stands to lose on this charter). I told them that it was minimal for a company like theirs with 60+ yachts and that they should pay Brian the money that he is due. The Manager then brought up a new arguement which was the lost income aspect because the yacht might lose the next 2-4 weeks or possibly more as she was undergoing repair.

I told him that was what insurance was for and he responded that loss of revenue insurance was expensive so most owner's didn't carry it. I told him that was between the owner and the insurance company and lost of future income was not Brian's responsibility. If the owner wants to cut operating costs, he can, but for him to hold Brian responsible for his lack of foresight is irresponsible. The issue here was Brian's deposit and payment of a charter that was prevented from continuing due to no fault of the skipper and crew.

Brian has disputed the charges with his insurance company and we're waiting on the reply from them but in the meantime to recap.

1. The Charter Company told Brian that he would lose his total payment plus would have to pay for a new yacht if he wanted to continue his charter despite the fact that signed contract said the opposite.
2. The Charter Company took a month to admit their mistake and offer a full refund, but one day later they turned around when the owner verbally "added" a clause to the contract that didn't exist in the one that Brian signed.
3. The charter company disregarded the contract and sided with the owner(and ultimately the Port Police and the High Speed Company) taking the approach to save themselves money rather than recognize that Brian was protected against the loss in the contract.
4. The Charter company only paid BJ 980 euro but kept the other 980 Euro that Brian had paid them in cash to pay BJ for the second week…. And they wouldn't return the 980 Euro to Brian.

These are the stories you read about in magazines or hear about on the news, but not what you expect would happen to you…. So you need to be prepared…. I can only suggest you look into insurance to protect yourself in the event that the unexpected happens…. The cost looks like a lot a first, but having to cancel your charter for any reason will end up costing you a lot of money!

I would thnk very seriously about purchasing Travel Insurance...

Click here to purchase or get more info....

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