The Crew Report has recently been covering the increase in cases of crew not being paid what they thing they are owed. The reasons for this cited by the Professional Yachting Association (PYA) include owners that have been poorly informed about the actual running costs for a yacht and, finding themselves financially stretched, see reducing crew costs as a quick way to cut their outgoings. It appears that the insurance sector has taken note of this unfortunate trend and is starting to fill the gap in the market with a new insurance cover designed to help crew in such situations.

Although the 2013 entry of the Maritime Labour Convention 2006 (MLC) has seen an influx of new rights and security for superyacht crew, there are still many owners and managers that are unsure of the extent and applicability of some of the requirements under the new regulation. Crucially, this unawareness includes the requirement for ‘financial security’ to be guaranteed by the vessel owner, leaving them liable for any unpaid wages owed to the crew. In the insurance sector’s latest response to this specific market demand, the Shipowners’ Club has launched a policy to indemnify clients against Seafarers’ Unpaid Wages Following Abandonment (SUWFA).

“We have noted that the issue of whether unpaid wages need cover continues to divide opinion,” says Ian Ferns, business development manager of the Shipowners’ Club, explaining the company’s decision to introduce the new cover. “While we agree with the International Group of P&I clubs that such cover is yet to be mandatory, we have been inundated with requests to provide such cover. Our yacht-owning members are increasingly faced with the request for a guarantee of ‘financial security’ as a contractual condition on a daily basis. Therefore, we decided to assist.”

"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."

This new insurance product available on the market responds specifically to abandonment. “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,” adds Ferns. “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 SUFWA policy is the latest response from the insurance sector that addresses the demands brought about by today’s increasing difficulties of superyacht ownership and it will be interesting to see if policies such as these spread throughout the industry. The popularity, of course, will only be seen if the demand is there. So if this is something that crew wish to see more of in their contracts, then they should be asking for it. This launch shows positive steps towards the future of crew welfare.