Waterkampioen watersport magazine

Salvage costs are part of the equation.

Insurers do not like salvage costs. The following case shows that they are willing to go to great lengths to avoid their obligation to pay compensation.

Mr. Zwart bought a motorboat at an auction in May 2008. After the sale it was moored in a saltwater harbor. The next morning, to his horror, he received a call from the Department of Public Works: his freshly purchased pride was on the bottom of the harbor. Zwart immediately reported the damage to his insurer, who sent an expert. That afternoon the boat had already been lifted and taken to a yacht yard. The damage expert had set things in motion when he arrived on the scene in the morning. The surveyor also discussed with the yard what needed to be done to the vessel to prevent further damage: salvage work, in other words. The ship was full of salt water and the engine had to be flushed as quickly as possible to prevent irreparable damage. The flushing of the engine and fuel system was to be commissioned by the shipyard.

Eventually, over a year later, a damage payment (total loss) was made to Zwart of €15,000. What the insurer did not pay out, however, was an amount of €4,500 for the shipyard in connection with salvage costs. However, Black had already paid this sum in advance! It turned out that the surveyor had told Zwart that he would not be able to take the boat with him if he did not pay the shipyard’s invoice in advance. Zwart thought this was strange, because surely these were costs that had to be paid by the insurer? He decided to pay, trusting that the insurer would reimburse him. Not so. Meanwhile it turned out that the flushing of the engine and the fuel system by the subcontractor had not been done properly. The tank and pipes were still full of seawater and when the engine was restarted, corroding seawater entered again. The engine had to be flushed again; another 2,000 euros.

Zwart thought that, because the subcontractor commissioned by the shipyard had not done the work properly, these additional costs should also be borne by the insurer.

The insurer did everything in its power to avoid paying. The invoice from the shipyard stated, among other things: “work carried out by the subcontractor, consisting of flushing the engine and the fuel system”. This would not have been necessary work but repairs to the vessel, according to the insurer.

The court made short work of this defense. The court found that the shipyard’s invoice stated salvage costs, which were therefore for the account of the insurer. As for reimbursement of the invoice for the second flushing, the court did want to know who had commissioned the shipyard to carry out the salvage work in the first place. If it turned out that the order had not been given on behalf of the insurance company, the costs of the second flush would have to be borne by Zwart. Black had to prove who had been the principal here.

It was clear to everyone that it was the surveyor. After all, it was he who had first assessed the ship and given all the instructions. The insurer had even acknowledged this during the proceedings, but later denied it again. The problem was that Zwart had paid the invoice in advance himself and that his name was on the invoice. This allowed the insurer to cast doubt. However, it soon became clear from the examination of the witnesses that Zwart had never had any contact himself with the shipyard or the subcontractor and that the surveyor was the only one who had had contact with the shipyard. The latter, in turn, had given instructions to the subcontractor. Thus, the liability of the insurer was established. Eventually all the costs were reimbursed. However, Zwart had to litigate for four years and was unable to use his boat during that time.

Tip: in the event of damage, make sure you know exactly what has to be done and who gives the order for salvage or repair. Do not be fobbed off too quickly with the assertion that certain costs are not salvage costs but, for example, repair costs and forward any invoices directly to the insurer without paying them yourself in advance. This will prevent a wretched discussion afterwards.

More information or download old articles: https://www.anwb.nl/kampioen/algemeen/digitaal-archief

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