Sunk superyacht most likely to cost insurance companies a minimum of $150 million, professionals state

Insurance companies of the Bayesian superyacht that sank this month, eliminating tech business owner Mike Lynch and six others, could be on the hook for a minimum of $150. million, according to the very first price quotes by industry professionals.

The British-flagged 56-metre-long (184-foot-long) private yacht,. which the professionals estimated cost around $40 million, capsized. and went down on Aug. 19 within minutes of being struck by a. pre-dawn storm while anchored off northern Sicily.

The superyacht's hull was insured versus physical damage by. private yacht insurance coverage provider OMAC and a consortium of insurance companies. consisting of Travelers Companies Inc, Navium Marine and. Convex, Reuters reported recently.

Its defense and indemnity (P&I) insurance coverage, which. usually covers third-party liability claims consisting of for. environmental damage, injury and death, was provided by British. Marine.

The hull was most likely guaranteed for around $40 million, while. the P&I cover would be bigger, insurance coverage sources said.

Our understanding is that the expense of the boat was between. $ 40 and $50 million, so the limit of the hull & & equipment policy. was probably around those values, stated Marcos Alvarez, managing. director, global banks scores at Morningstar. DBRS.

The P&I policy would likely be a number of multiples of the. hull policy, or $200-300 million, Alvarez added, noting it would. also likely cover liability payments even if the captain or team. are discovered to be negligent.

District attorneys in the town of Termini Imerese, near Palermo,. are examining the captain and two other crew members. An. examination does not imply regret or mean official charges will. follow. Prosecutors have said the probe would take time and. need salvaging the wreck.

Oscar Seikaly, CEO of broker NSI Insurance Group, that. offers yacht insurance, estimated the hull value at $40-70. million, but stated P&I cover might not total more than $100. million.

P&I insurance would also cover recovery of the Bayesian,. said Francesco Dubbioso, country supervisor for Italy for insurance company. Alta Signa Europe, who estimated the superyacht's value at $30. million to $40 million.

Reuters is the very first to report the prospective insurance. expenses. OMAC, Travelers and Navium Marine did not right away. respond to Reuters' for remark. Convex declined to comment.

The Bayesian disaster, which has puzzled specialists who said. the boat would have been built to endure a severe storm, adds. to recent problems for luxury yacht insurance providers, who have actually dealt with a raft of. typhoon losses in the past few years.

Premium rates have actually increased by four to 5 times in the past. couple of years in parts of the U.S. and the Caribbean, and. luxury yacht insurers have actually cut the amount of cover they supply due to the fact that. of the threats, Seikaly stated.

As a result, insurance companies have actually increased rates and re-evaluated. their guidelines and risk hunger, according to market. specialists.

In addition to typhoons, insured losses have primarily stemmed. from serious storms, floods, and other weather occasions in North. America, the Caribbean, and Europe, according to a report by. broker Marsh.

Seikaly said four customers had last week been prepared to purchase. boats but changed their minds since of the high cost of. insurance coverage.

Environment modification was also most likely to add to private yacht insurers'. worries, Seikaly included, as it throws up more unanticipated occasions.

Whoever thought a storm in the Mediterranean in the month. of August is going to sink a ship?.

(source: Reuters)