24 minute read
Time Out for Tall Ships
Traditional sailing proves an addictive pastime for one hard-working chief officer.
Story and photos by Birgit Kaspar
Igrew up in a small village in South Germany, far from the sea. Yet, to the bafflement of my parents, I became fascinated with big sailing ships at an early age. After high school, I had the chance to crew one of these magnificent vessels and spent six weeks sailing the Baltic Sea. That’s where I caught the “tall ships bug,” an unshakeable affliction that pervades the soul.
It is hard to describe to people who have never been on such a ship. It’s the uplifting feeling when the ship gains speed, propelled only by the power of the wind, and the peaceful silence when no engine or generator is running. It’s the tight-knit camaraderie of working together in the yards, despite the weather or time of day, the stories you tell each other during night watch, and the amazing sunrises you enjoy in the early hours of the morning with your first coffee of the day.
I crewed a number of such vessels over the years, eventually sticking with two that became my favorites: the brig Roald Amundsen and the ketch Jonas von Friedrichstadt.
Roald Amundsen, a 164-foot (50m) seagoing vessel, has crossed the Atlantic numerous times, traveling as far as the Cape Verde Islands, Brazil, the Great Lakes, and Iceland. We sail her day and night, following the traditional watch system. Jonas, on the other hand, is a 98-foot (30m) one-season ship that spends summers in the Baltic and some weeks in the tidal flats of the North Sea. With her size and shallow draft, she is great for small harbors, anchoring close to shore, or tying up to just a rock in the Baltic archipelagoes.
All these traditional ships are run by nonprofit organizations and all crew are volunteers — a crazy group of people who spend all their time off working on these vessels, whether maintaining them
dockside or sailing them as crew.
Who in their right mind gets up in the middle of the night to climb into the rigging and work with the sails, or stands out on the open bridge for hours in the rain to make sure the right course is maintained, while not getting a dime for doing it? I do, and many others!
Our job is to teach the trainees how to work with the sails, how to stand a watch, how to steer the ship, and all the other aspects of traditional seamanship. It’s so uplifting to watch a group of total strangers merge into a team after just one week. It’s such a pleasure to see managers working side by side with students and retirees, hoisting a yard or setting a sail.
Age, profession, sex and nationality don’t matter on a tall ship; everybody is a member of the same team. And only the team can sail the ship. Every task must be done manually and everyone must pitch in — even climbing up the masts to unfurl and fasten the sails.
You may ask how a person who works in yachting is crazy enough to spend time off on the water. The answer is simple: It’s the people, the cruising grounds, and the fact that everything happens at a more relaxed pace. For me, volunteering on tall ships is the perfect balance to the pressures and stress of yachting life.
I love the Baltic and the North Sea. I love the long, bright evenings of midsummer in Sweden or Finland, and being the lone vessel in a quiet anchorage off the little islands of the northern archipelagoes. I never tire of the colors of the tidal flats during sunset and sunrise, or the thousands of sea birds migrating over the North Sea islands in the spring. And I would hate to miss the barefoot walks on the seabed during low tide.
It is a passion and privilege to share these priceless experiences with friends — because, on a tall ship, that is what we are: strangers who become good friends, comrades who have caught the “bug.” ‹
CHIEF OFFICER BIRGIT KASPAR HAS WORKED IN YACHTING FOR MORE THAN 20 YEARS ON YACHTS INCLUDING M/Y HAIDA G, S/Y PHOCEA (NOW ENIGMA), M/Y ARCADIA, M/Y GLADIATOR, S/Y CORSTA V (NOW ALLURE) AND M/Y BLUE SHADOW. SHE HOLDS AN MCA MASTER 3000-TON LICENSE AND IS CURRENTLY SEEKING HER FIRST COMMAND. SHE CAN BE CONTACTED THROUGH HER WEBSITE AT BALTICPURE.COM.
GIVE IT A GO!
For opportunities to work on a traditional tall ship in the U.S., check the Billet Bank at tallshipsamerica.org or just scan the QR code.
CONFIDENT YOU’RE COVERED?
Liability insurance is not a cut-and-dried proposition when it comes to injury and illness in yacht work.
By Dorie Cox
Many things can break on board a yacht, including the crew. So when a crew member falls down a hatch, contracts malaria, or runs over a snorkeler with the tender, it’s important to know how liability insurance coverage works. Yet, as with many things yachtrelated, it can be confusing.
Am I considered crew?
“Crew” are defined as those employed on a vessel who are aboard, in service, and necessary to the vessel’s intended navigation, according to Scott Stamper, managing director with Risk Strategies/Atlass Insurance Group. If employees meet that criteria, then the vessel has liability regardless of the contractual agreement that outlines their method of compensation, health insurance, vacation, or other benefits.
On the other hand, “persons who are temporarily contracted to carry out maintenance, repair, or refit in a shipyard or marina are not crew,” he said. Labeling such workers as “crew” may provide access to marinas and shipyards, but it does not ensure liability coverage in the same scope as crew. Say the yacht captain adds a professional boat washer to the crew list while in the shipyard. While on the top deck, the cleaner slips on soap suds, falls, and breaks his back. Although the captain hired him and labeled him as crew, he is not — and that affects the level of vessel liability.
Dayworkers are also not crew. They are temporary subcontractors, he said, and insurance typically will not respond to the injury claim of a dayworker in the same way it would for a crew member.
That equation, however, can change in light of many variables: vessel ownership structure, flag state, crew nationality, and navigational itinerary, for example, Stamper said. “Ultimately, it may not be how the insurance chooses to respond, but how a judge or court of competent jurisdiction may interpret the claimant’s employment connection to the vessel.” Are the self-employed covered?
Those who are defined as “crew” fall under the vessel’s liability coverage, even if they are self-employed, Stamper said. Their method of compensation — as a paid crew member, an employee, 1099 independent contractor, or subcontractor through a limited liability company (LLC) or S Corporation — has more to do with taxation than their validity or status as a paid crew member. Recovery for expenses related to injury or illness in connection with their crew duties is clearly owed by the vessel, he said. But if the employee is not defined as “crew,” it becomes a gray area. Graeme Lord, president and owner of Fairport Yacht Support, notes that after an incident involving a limited liability-type company, the question of whether the captain or crew member is the
employee of the yacht or of his own business often ends up in the legal arena. An LLC may enhance a crew member’s financial situation, Lord said, but what it hasn’t done is looked at the liability. The issue then becomes the legal costs of engaging with the insurance company.
“As an LLC, you are taking on Goliath,” he said. “You may extract yourself from the lawsuit, but it will be very expensive.”
He has seen insurance companies say, “No worries, we will handle it,” after an accident. But later, after depositions, it is established that the captain is not an employee of the yacht.
Then there’s the case of captain or crew negligence — and here’s where it really gets tricky. Generally, the yacht’s insurance covers the captain and crew for their own negligence, according to attorney Erin Ackor, at Moore and Company. “However, if the captain or crew member is employed through their own entity, this causes problems for the insurance, as this captain and crew company cannot generally be added to the owner’s policy as a joint or additional insured.”
What’s more, an insured or joint insured cannot be liable to themselves, she said. Captains and crew can obtain their own insurance versus being added to the owner’s policy, but this has to be worked out with the vessel underwriters, including obtaining a written agreement on what coverage they will provide.
What about dayworkers?
A dayworker’s particular relationship with the yacht is key here. Rupert Connor, president of Luxury Yacht Group, recommends that yachts have an insurance clause for temporary workers, as well as have them sign a contract and use a time card.
“It says, basically, ‘We are responsible for this and nothing else. If you think something is unsafe, you need to stop work and notify this person onboard.’ It defines that they are not a crew member, but an hourly laborer,” Connor said.
On the other hand, if a yacht has five crew on holiday and five replacements contracted on a day rate, they are effectively part of the crew and insurance would cover them, he said. “I would give those crew an SEA that just pays fixed duration rate instead of voyage.”
What if there’s no employment contract?
Legal and insurance experts urge crew members to always work with a signed Seafarers Employment Agreement. However, if an incident occurs and there is no written agreement, crew may still be entitled to remedies on an oral contract alone under seafarer protections provided in conventions such as the Jones Act or the Maritime Labor Convention.
Maritime injury attorney Adria G. Notari of Notari Law cautions against accepting partial payments or advances marked as ‘final payment’ or ‘payment in full,’ because it might forfeit your right to further compensation. In one case, a crew was injured working on board without a written crew agreement. The employer tried to terminate him before reimbursing complete medical expenses and paying wages due.
“In the memo line of the check, they wrote, ‘final payment,’” Notari said. “Fortunately, he contacted me before cashing the check.”‹
UNDERWRITERS AT THE HELM
New technology, hurricane losses and yacht insurer shutdowns are behind rising insurance costs and increased restrictions on cruising grounds.
By Capt. Jeff Werner
Many yacht owners decide to buy a yacht to fulfill their wanderlust and desire for adventure. However romantic that notion may be, it is soon dampened by the risk-averse underwriters who control the yacht insurance market. When yacht owners shop around for insurance, they are faced with very high premiums and loss deductibles from underwriters who limit cruising grounds based on their risk assessment. In some cases, yacht insurance premiums have risen by at least 43% from 2021 to 2022.
Underwriters proscribe cruising grounds because of weather severity or a port of call’s political risks. They also require that owners and crew have certain levels of skill or experience for passage making in order to lower the high cost of insurance premiums.
How did we get here?
Veteran yacht insurance brokers and industry analysts agree that three factors have coalesced in the past few years to create a perfect storm for insurance underwriters and owners alike: technology, hurricanes, and loss of insurers.
Newer technology is driving up claim costs. Pod drives that allow for joystick control when docking can cause damage when they fail or are in the hands of inexperienced operators, which increases claims over that of traditional twin-screw vessels. With the proliferation of computercontrolled engines, navigation systems, entertainment systems, and communication systems, lightning strikes and power surges at the dock can generate claims starting at $50,000 worth of damage aboard a yacht.
Record hurricane activity in recent years has also meant record damage and losses to recreational vessels, and a loss of profits for insurers. Pantaenius, among others, no longer writes insurance policies along the Gulf of Mexico, in Florida, or in the Caribbean.
For many years, insurers such as Lloyds undercut pricing to gain market share and attract business. Their high-risk insurance riders for American-flagged yachts cruising Cuba were popular for many years. Lloyds was unprofitable because it collected premiums that were too low for the true risk that it was underwriting. The result today is that agents who insure yachts no longer have access to the Lloyds insurance market. In 2020 alone, at least 12 companies that write yacht insurance closed.
Insurance creep elsewhere in the yachting world
Every large marina now requires yacht owners to carry at least $500,000 in liability insurance. They also may request that the yacht owner add the marina as additional insured on the yacht’s insurance policy before they allow dockage for extended periods of time.
Royal Yachting Association training centers worldwide have experienced an increase in the number of superyacht crew taking Yachtmaster theory and practical courses. Driving this increase in students are insurance companies offering discounts on premiums paid by the yacht owner if entry-level deck crew, such as deckhands, obtain their RYA Yachtmaster Offshore Certificate of Competence. Deckhands typically don’t have the breadth of experience or the sea time necessary to be adequately prepared for the rigorous Yachtmaster program. This has necessitated RYA training centers to offer two-week “zero to hero” classes with failure rates as high as 50%, which has compromised the RYA’s well-established building block approach to its reputable training scheme.
What can a yacht owner do?
Be proactive. Work with a reputable and well-established yacht insurance broker. Discuss with them the factors that are driving up the costs of premiums for the coming year before the policy renewal notice is received. These conversations should also include the reality of limited insurance market choices and trends in underwriting requirements. Knowing what can be done to reduce risks aboard a yacht — such as hurricane plans, use of anti-theft devices, and hiring the most experienced crew available — will help to meet the risk management requirements of underwriters.
Circumnavigating the globe or cruising to find those last outposts of stunning untouched natural beauty and pristine anchorages may be difficult to do in the current underwriting climate, but they are doable with sufficient planning and budgets for the necessary yacht insurance. ‹
JEFF WERNER HAS BEEN A YACHT CAPTAIN FOR MORE THAN 30 YEARS. HE IS A CERTIFIED INSTRUCTOR FOR THE RYA, USCG, AND U.S. SAILING, AND OWNS DIESEL DOCTOR (MYDIESELDOCTOR.COM).
THE FOREVER SOUGHT-AFTER ROTATION
Everyone wants it. The question is, can you afford it? Here are some financial pros and cons to consider.
By Tia Taylor
Three words: Charter Rotation Position! These three words bring joy to the ears of many in search of their next vessel. Charter yachts provide the ability to earn extra cash, while rotations provide the extra freedom of time. It’s easy to see why so many crew members are looking at this combination as the next step in their career.
With all the positives, most would not hesitate at accepting a charter rotation position — but first, there are a few concerns to take into account. A rotation position often means less pay per month. It’s obvious that since you work less, you will be paid less; what’s not always immediately obvious, however, are the ramifications.
On the upside, you would have months off-board to explore and travel where a boat cannot go or to visit family and friends. It’s a beautiful opportunity that most land-based employees never get to have. On the downside, you would now need to find housing, and unless you opt for hostels or to go home, this will be expensive. Not to mention the added cost of meals and transportation, which can spike your spending significantly — and at the same time that your income is shrinking.
The goal of this article is not to say that rotation is bad. In fact, it is one of the best perks of our wonderful industry! The goal is to show how important it is to financially plan for making the switch. When you lay out the pros and cons, you can make a
better decision on what type of rotation works best for you, what additional expenditures you will have, and if you can afford the trips you want to go on.
Let’s take Kevin, for example. He is a chief officer on an 83m charter vessel and has finally persuaded the captain to put him on rotation. His captain offers him a 2:2 rotation (two months on, two months off). Wow, he will have half the year off! But his salary will fall from $9,000 to $6,300 a month. Chief Officer Kevin first needs to weigh the pros and cons of accepting this rotation.
On the one hand, his salary will fall by 30% and he will miss a few charters during the busy season. He already has plans for lengthy visits to Japan and Germany, which will be costly. On the other hand, Kevin will get to enjoy free time with his family. Relaxation, travel, and time for hobbies are important to him, and he recognizes that time is money. Kevin decides he still wants the rotation, so the best financial move would be to plan the Japan and Germany trips in different parts of the year, allowing more time to save for them, given the lower salary.
There are many benefits to rotation, so long as you financially plan for the changes in your income and expenses. Find the balance that is right for you between the joy of free time and the opportunity to earn the income you desire. ‹
TIA TAYLOR HAS WORKED IN YACHT MANAGEMENT FOR FIVE YEARS, AND PROVIDES CONSULTATION AND TRAINING IN FINANCIAL LITERACY FOR CREW AT LUXURYLEARNINGSOLUTIONS.COM.
Pollution insurance required for yachts operating in USA waters
By Capt. Jake DesVergers
Operating yachts in U.S. waters requires compliance with a number of laws, regulations, and codes. Many of these requirements are met through various means, including vessel design, insurance, specific contractors, approved manuals, and safe operations. Applicability of these obligations can change depending upon the size of the yacht and where it cruises.
The Clean Water Act, as amended by the Oil Pollution Act of 1990, provides the basic statutory authority for pollution prevention, contingency planning, and response activities for oil and hazardous substances. Enforcement covers all U.S. waters and extends to the 200-mile Exclusive Economic Zone.
For insurance, every yacht operating in U.S. waters must have some type of liability coverage for potential water pollution. Starting at 300 gross tons, yachts must prove that financial protection by obtaining a Certificate of Financial Responsibility (COFR) from the U.S. Coast Guard (USCG). The fees collected as part of this regulation are used for removal costs, payment of claims, research and development, and other specific appropriations.
In addition, for those yachts over 300 gross tons, the International Convention on the Removal of Wrecks requires proof of insurance coverage. It makes the registered owner of a yacht liable for locating, marking, and removing a wreck deemed to be a hazard in a particular country’s area.
For yachts over 400 gross tons, a vessel-specific Nontank Vessel Response Plan (NTVRP) must be reviewed and approved by the USCG. As part of the NTVRP, each yacht is assigned a Qualified Individual for emergency response, oil spill drills are conducted on board, and contracts are established with an oil spill response organization (OSRO) and salvage/marine firefighting (SMFF) company. In some states, such as California and Alaska, there are additional requirements for operating in their waters.
For yachts over 1,000 gross tons, the International Convention on Civil Liability for Bunker Oil requires insurance or other financial security, such as the guarantee of a bank or similar institution, to cover the liability of the registered owner for pollution damage in an amount equal to the limits of liability. These types of plans are normally in the millions of dollars. ‹
CAPT. JAKE DESVERGERS IS CHIEF SURVEYOR FOR INTERNATIONAL YACHT BUREAU (IYB), WHICH PROVIDES FLAG STATE INSPECTION SERVICES TO YACHTS ON BEHALF OF SEVERAL FLAG STATE ADMINISTRATIONS.
a wandering life is a wonderful thing
...except when it comes to taxes, residencies and trying to get a mortgage!
By Calum Smith
Ayachting life often is perceived as one of glitz and glamour by those on the outside, while those on the inside know all too well that along with the sunshine and sandy beaches comes hard work and a plethora of obstacles to negotiate — obstacles thrust upon you by a type of nomadic lifestyle found in few other industries.
We asked some of our clients here at Marine Accounts to tell us what they’ve found to be the biggest challenges of yachting, especially regarding interactions with the “normal” world while constantly on the move, quite often without one specific place to call a permanent home. The conversations revealed a few recurring themes, such as mental health, taxes, residency, and mortgages. Here are some of the highlights.
Where do I actually live?
It could easily be said the opportunity to travel the world is the most obvious draw to a yachting career. One client, Jamie Weldon, put it this way:
“It’s not just that I get to wake up to some of the most beautiful views in the world as a part of my job, it also gives me a chance to scope places out for my next holiday. Most people pick somewhere from google which looks nice. I know the places I enjoyed whilst working and that’s where I head back to.”
There is, however, a downside to living life on the move. During our discussions with crew, we found common concerns around tax residency status, with many unsure where they should be paying their taxes — or if they should be paying them at all when they don’t really have a home. Dock chat on this topic may be common, but with so many people approaching their tax situations in very different ways, it’s easy to get confused.
In very simple terms, you should always declare your income wherever in the world you are a resident for tax purposes. Each individual jurisdiction or country will apply their own tests to your circumstances; if you don’t meet their tests, then you’re not a resident.
While there are many crew who believe they are not a resident anywhere, in reality there are very few who find themselves in this position. Also, liabilities do not just occur at home but can arise from a yacht spending too much time in foreign ports or acquiring a residence in a new country. Since the introduction of the Automatic Exchange of Information in 2014, tax authorities have had the right to approach your bank for details of your income and tax residency, meaning there really is nowhere to hide.
If you’re unsure as to your position, it’s always recommended to consult with an expert to be absolutely certain that you’re doing the right thing, as the sanctions can be severe.
FREE RESIDENCY CHECK
Residency is key to determining your tax position, but knowing where you are resident can be confusing when you work on yachts. Those who come from one of the following countries can use this QR code for a free tax residency status check. United Kingdom • Ireland • Australia • New Zealand • Spain • France • South Africa Learn more at marineaccounts.com What do I do after yachting?
A stint in yachting can be a great way to set yourself up for your future. With many roles offering great wages and some being lucky enough to access tax exemptions, it’s common for many crew to spend their 20s at sea, then take their nest egg ashore. Jonny Waugh put it this way:
“I know I’m going to lose some of my freedom over the next few years and I’ll be working long hours with high demands, but when I’m done, I know I’ll have some money in the bank and hopefully a house. I’m already looking at mortgages.”
Others we spoke with echoed Jonny’s thoughts. There are few other industries in which you will find yourself having little to no living expenses while employed. With travel, accommodation,
and food covered by your employer, you’re presented with a fantastic opportunity to set yourself up financially very early on in your working life.
Many crew will look at property as an investment, however, the lack of a permanent home can sometimes be an obstacle to obtaining a mortgage. If you approach most mortgage brokers as an individual who doesn’t live anywhere in particular and perhaps doesn’t pay taxes, you may find yourself rebuffed. That said, specialists are available to help you navigate the process, and with a little effort to find the right broker, you can certainly put yourself on the property ladder.
As with any job, a career in yachting has its ups and downs, and it isn’t for everyone. The average crew member stays in the industry for roughly seven years, and you likely know someone who is in their “last season” for the second, third or fourth time.
But if you have made good use of your wages while working at sea, the move shoreside should be plain sailing. Many continue in the maritime industry; others decide it’s time for a career in a completely different field. A strong financial foundation will give you the time and freedom to make the choice that is right for you. ‹
CALUM SMITH HOLDS A DEGREE IN ACCOUNTING AND FINANCE. HE HAS BEEN PROVIDING TAX AND RESIDENCY ADVICE AT MARINE ACCOUNTS SINCE 2017.
Answers to Triton Double Take, Page 28
Answers to the quiz on Page 22
1. Starboard side 2. None 3. Francis Chichester 4. False 5. Starboard 6. Nautilus
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