The MYBA contract leaves four specific insurance gaps on the charterer’s side. A clause-by-clause walkthrough of what they are and how to close them.
The contract sitting behind almost every serious crewed yacht charter in the Mediterranean is the MYBA Charter Agreement, currently the 2025 edition. Insurance is stipulated in Clause 16 which also one of the sections that receives the least attention during the booking process.
Most clients -understandably- focus on the yacht itself, the itinerary, the destinations, and the experience ahead. By the time they receive the contract for signatures, there's often an assumption that if the yacht is insured, everyone on board is protected as well. In reality, the position is more nuanced than that.
The yacht is insured. The charterer, however, is not necessarily protected against every risk that can arise during the charter, and that distinction becomes important surprisingly quickly.
A careful reading of Clause 16 reveals four meaningful insurance gaps that remain on the charterer's side. Some are relatively minor and easily addressed. Others can create six-figure exposures, particularly on larger yachts where deductibles, cancellation costs, or third-party claims can escalate rapidly.
In this article, we'll walk through those gaps one by one. Every contractual quotation comes directly from the MYBA 2025 agreement. Some of the analysis reflects practical experience as a broker and former captain rather than contract language alone.
At Frontier Yachting, we arrange crewed charters throughout the Mediterranean, and one question comes up repeatedly:
"Do I actually need separate insurance for a yacht charter?"
In many cases, the answer is yes.
The reason becomes clear once you understand what the Owner's insurance does cover, and just as importantly, what it doesn't.
What the Owner Insures
Clause 16 a establishes the minimum insurance requirements that the Owner must maintain throughout the charter period:
"Throughout the period of this Agreement the OWNER shall insure the Vessel with first-class insurers against all customary risks for a Vessel of her size, value, and type of cover not less than is provided under Institute Yacht Clauses 1.11.85 or other recognised terms extended to provide Permission to Charter and to cover Third Party liability, Water Skiers liabilities together with liabilities arising from the use by the CHARTERER and other competent person(s) authorised by the CHARTERER of all watersports equipment. The insurance shall also cover War, Strikes, and Pollution and include insurance of Crew against injuries and/or third-party liabilities incurred during the course of their employment."
Taken at face value, that's a substantial package of protection.
The yacht itself is insured under recognised yacht policy standards and the cover is extended specifically for charter operations. Third-party liability is included, as are liabilities arising from watersports and waterskiing activities. The policy must also cover war risks, strike risks, pollution liabilities, and crew-related injury and employment exposures.
From the Owner's perspective, that's exactly what you'd expect to see. If something goes wrong with the yacht itself, the crew, or a risk that properly belongs on the Owner's side, there should be insurance in place to respond.
The detail that often gets overlooked appears in the second half of the same clause:
"The CHARTERER shall remain liable for any loss, damage or liabilities arising from any act of negligence of the CHARTERER or their Guests and not recoverable by the OWNER under their insurance. Should any claim be made under the OWNER'S insurances in respect of matters for which the CHARTERER is liable, any deductible shall be for the account of the CHARTERER."
Buried within those two sentences are two important points that many charterers miss when reading the contract for the first time.
The first is that the Owner's insurance is not an unlimited safety net. If a loss arises through the negligence of the charterer or their guests and that loss falls outside the scope of the Owner's policy, the responsibility remains with the charterer.
Like every insurance policy, the Owner's cover has exclusions, limitations, conditions and deductibles. Anything that falls beyond those boundaries may ultimately find its way back to the charterer.
The second point concerns deductibles.
Even where the Owner's insurance does respond to a claim, if the underlying incident is something for which the charterer is contractually liable, the deductible remains the charterer's responsibility. On a large motor yacht, that deductible can easily run into five figures.
In other words, the first indication that the charterer carries meaningful exposure appears in the very clause that many people assume protects them.
The contract becomes even more explicit a few paragraphs later.
The Sentence That Matters Most
If there's a single sentence in the MYBA contract that every charterer should read carefully, it's Clause 16 d.
It's short, direct, and unusually clear for legal drafting:
"The CHARTERER should be aware that neither Charterer's Liability Insurance nor Cancellation and Curtailment Insurance are included in this Agreement, it is strongly recommended that the CHARTERER obtains their own insurance in this regard."
Discover the destinations
From the Cyclades to the Caribbean, see the destinations our fleet covers, summer and winter.
The contract is effectively telling the charterer that two specific categories of insurance are not included as part of the arrangement.
The phrase "strongly recommended" is worth paying attention to. In contract language, it's often the closest thing you'll get to a warning without the clause becoming mandatory.
The agreement isn't requiring the charterer to buy insurance. What it is doing is making it clear that responsibility for those risks sits elsewhere.
Clause 16 c adds two further categories:
"The CHARTERER should carry independent insurance for personal effects whilst on board or ashore and for any medical or accident expenses (including emergency transport evacuation) incurred."
When Clauses 16 c and 16 d are read together, four distinct insurance gaps emerge:
Charterer's Liability Insurance (Clauses 16 a and 16 d)
Cancellation and Curtailment Insurance (Clause 16 d)
Medical, Accident and Emergency Evacuation Insurance (Clause 16 c)
Personal Effects Insurance (Clause 16 c)
Each gap represents a different type of risk.
Some involve liabilities that can arise during the charter itself. Others relate to events before the charter begins, such as cancellation. Some are highly situational, while others are relevant to virtually every charter client regardless of destination or yacht size.
The important point is that none of them are covered simply because the yacht is insured.
Let's look at each one in turn.
Gap 1: Charterer's Liability Insurance
This is the gap the contract is most direct about, and the one most clients are least prepared for.
What it covers, in plain language: any liability the charterer or the guests run up during the week that the Owner's policy doesn't pick up. The Owner's policy is for the Owner. Your liability is separate, and the contract is explicit that it doesn't transfer to the boat.
Some of the scenarios this product is designed around:
A family member on the yacht's jet ski loses control, hits another vessel, and injures a passenger. The Owner of the other vessel and the injured passenger both come looking for compensation. Any claim made under the Owner's insurance for something the charterer is liable for comes back to Clause 16 a, with the deductible (and anything outside the policy) on the charterer.
Local authorities board the yacht and find prohibited substances in a guest cabin. The Owner is fined. The Owner seeks recovery from the charterer through Clause 13 i, which we'll come back to.
A guest negligently injures a crew member. The crew member sues. The Owner's crew cover is for employment-related incidents, not for guest-caused injuries through negligence. The charterer is exposed.
A guest falls ill at sea and the captain deviates to a port to land them. The deviation runs up serious additional fuel and port charges, and the Owner is entitled to recover them.
None of those are exotic scenarios. They're the kind of thing brokers and managers see across the season, often enough that the product exists.
One product that fills this gap and we often refer clients to is Fort Insurance's Yacht Charterers' Liability Cover, underwritten by Steamship Mutual P&I Club. Steamship Mutual is one of the biggest P&I providers in yachting, which matters because the cover is properly backed. Cover extends to the charterer, immediate family, guests and crew, with watersports and deviation included and a serious headline liability limit.
Happy to walk you through the detailed numbers if it's something you want to look at for a specific charter.
Gap 2: Cancellation and Curtailment Insurance
The same Clause 16 d sentence that flags Charterer's Liability flags Cancellation and Curtailment.
What happens if you cancel is in Clause 11 a i:
"The OWNER shall be entitled to receive all Instalments which have become due and payable in accordance with the due date(s) on Page One of this Agreement and the Stakeholder shall pay any such sums it holds to the OWNER, less commissions as set out in Clause 24. The OWNER shall have a claim against the CHARTERER for any unpaid sums which are due and payable as at the time of cancellation."
Translated: the Owner keeps whatever instalments have come due as of the cancellation date. No flat percentage scale on the charterer side.
A quick clarification, because this trips people up. There is a 25/35/50 cancellation scale in MYBA 2025, but it's in Clause 9 d ii and it works the other way. That scale is what the Owner pays the charterer in liquidated damages if the Owner cancels for a reason other than force majeure. It is not the scale that applies when the charterer cancels.
When the charterer cancels, the Page One instalment schedule does the work.
Most MYBA contracts run a 50% first instalment at signing, with the balance plus APA plus VAT due thirty to sixty days before the start of the charter. So if you cancel after that first instalment, the Owner is entitled to retain the 50% subject to mitigation. On a €200,000 Mediterranean charter, that's €100,000 on the table before any re-letting credit. Cancel after the second instalment is due, and the exposure is the full Charter Fee less mitigation.
Mitigation is in Clause 11 c. The Owner has to try to re-let:
"Notwithstanding the OWNER'S right to receive or retain all payments referred to above, at Clause 11(a) whether due to cancellation or non-payment, the OWNER shall be under a duty to mitigate the CHARTERER'S loss as set out in this Clause 11(c). In the event that the OWNER is able to re-let the Vessel for all or part of the specified Charter Period under this Agreement, the OWNER will give pro-rata credit to the CHARTERER for the net amount of charter hire arising from such re-letting after deduction of all commissions and other consequential expenses arising from such re-letting."
In practice, mitigation is a partial offset. Re-letting a specific week on a specific yacht at full rate inside a short window is hard, and the credit is the net amount the Owner clears after commissions and re-letting expenses come out.
Browse the fleet
Crewed yachts for every kind of week on the water, from catamarans and sailing yachts to full-size superyachts.
The product that closes this gap is Fort Insurance's Charter Cancellation & Interruption cover, underwritten by United States Fire Insurance Company (Crum & Forster, AM Best A-rated). It comes in two tiers, a standard plan covering the usual list of reasons (illness, injury, death, theft of travel documents, natural disaster, hurricane warning and so on), and a Cancel for Any Reason plan that adds a broader catch-all at a lower payout percentage.
One detail worth flagging up front: the policy has to be purchased within twenty days of the initial trip deposit. Past that window the option is gone.
Gap 3: Medical, Accident and Emergency Evacuation
Gap 3 is in Clause 16 c, the same clause that covers personal effects. Quoted again for completeness:
"The CHARTERER should carry independent insurance for personal effects whilst on board or ashore and for any medical or accident expenses (including emergency transport evacuation) incurred."
This is the gap most people imagine when they think "travel insurance," and the financial exposure can be material. A medical evacuation by helicopter from a remote Cycladic anchorage to a hospital on the mainland isn't a number anyone wants charged on a credit card, particularly when the patient needs medical escort and ongoing care during transit.
The same Fort Cancellation & Interruption product also bundles medical and evacuation cover at meaningful per-person limits, so Gaps 2 and 3 close together under one premium.
Gap 4: Personal Effects
Gap 4 is in the same Clause 16 c sentence. And in practice, it's the lightest gap of the four.
Most charter clients at the relevant price point already have personal effects cover through home contents or an existing travel policy. The watch, the camera, the jewellery, typically already insured at home.
Two things worth confirming with whoever holds your home policy, before you go:
If either fails, this is the cheapest gap to close. A standalone travel-effects rider on an existing policy is straightforward and usually inexpensive.
Personal effects is the one gap of the four that Fort's products don't directly cover. It usually doesn't need them to.
Adjacent Exposures: Clauses 10 b and 13 i
Clause 16 covers most of the insurance. Two other clauses create real charterer exposure that makes the case for proper liability cover even stronger.
Clause 13 i addresses charterer or guest illegal acts:
"If the CHARTERER or any of the Guests shall commit any offence contrary to the laws and regulations of any country which results in any member of the Crew of the Vessel being detained, fined or imprisoned, or the Vessel being detained, arrested, seized or fined, the CHARTERER shall indemnify the OWNER against all loss, damage and expense incurred by the OWNER as a result."
That's the clause that bites in the prohibited-substances scenario, the customs misstep, the immigration violation that gets the yacht held in port. The charterer indemnifies the Owner for all the consequences.
Clause 10 b addresses late re-delivery:
"If the CHARTERER fails to re-deliver the Vessel to the OWNER at the Place of Re-Delivery due to intentional delay or change of itinerary against the Captain's advice, then the CHARTERER shall pay immediately to the OWNER via the Broker or Stakeholder's account compensation for such delay calculated as an amount equal to one and a half times the Charter Fee on a pro-rata basis for such period of delay in re-delivery. The CHARTERER shall be liable for all operating costs as per Clause 8 during such period of delay and shall indemnify the OWNER for any loss or damage which the OWNER shall suffer by reason of deprivation of use of the Vessel or cancellation of, or delay in delivery under any subsequent charter of the Vessel."
So if the charterer pushes the captain past the agreed re-delivery time against his advice, the bill is one and a half times the daily Charter Fee, plus operating costs, plus indemnity for any knock-on loss on the next charter the yacht was meant to deliver to. On a €200,000 weekly charter (around €28,500 per day), that's roughly €43,000 per day of delay, before operating costs and consequential losses.
Neither of those clauses changes the four gaps under Clause 16. They do mean the case for proper Charterer's Liability cover is stronger than the headline scenarios on their own.
What to Confirm Before Signing
A short checklist for anyone about to sign a MYBA charter.
Get a summary of the Owner's insurance from the broker. A good charter broker will confirm Clause 16 a is in place with the relevant flag state and the standard charter extensions, and give you the policy deductible in writing.
Identify how each of the four gaps is covered. Charterer's Liability, Cancellation and Curtailment, Medical and Evacuation, Personal Effects. For each one, the answer is either a specific product you've taken out, an existing policy you've confirmed the limits on, or "I'm carrying the exposure myself." There isn't really a good fourth answer.
Match the cover to the charter value. Cancellation insurance pays a percentage of the insured trip cost, which means you have to insure the actual trip cost, not a round number you guessed.
Buy early. The cancellation product has a tight purchase window (twenty days from the initial trip deposit). Past that, the option is gone. The Charterer's Liability Cover doesn't have the same window.
Check coverage residency. Worth confirming that the products are available in your jurisdiction, particularly for clients outside the EU and US.
The Products We Point Clients Toward
Two Fort Insurance products cover three of the four gaps. The Yacht Charterers' Liability Cover handles Gap 1, and the Charter Cancellation & Interruption product handles Gaps 2 and 3 under a single policy. Gap 4, personal effects, almost always sits with an existing home or travel policy and doesn't need a separate product.
Fort is based in Antibes and Fort Lauderdale. There's no formal brokerage relationship between Frontier Yachting and Fort Insurance. We've spoken to their team, we think their products are the right shape for the gaps Clause 16 leaves, and we're happy to make the introduction for clients who want to look at it in more detail.
For the weather side of charter risk that sits outside Clause 16 entirely, parametric weather insurance is worth a separate read.
Worth Doing Before You Sign
Clause 16 isn't hidden, vague or buried in legal Latin and the four gaps fall out clearly once you know what to look for. The problem is that the clause rarely gets read carefully at the point of signing.
The right time to deal with the gaps is before signing. After something happens, the contract you signed is the contract you signed.
If you want to walk through your specific charter and figure out which gaps need closing, we can do that with you. The products themselves come from Fort directly.
Reach out to us at Frontier Yachting with any questions you might have.
Get in touch and we'll walk you through it. You can also browse the fleet here.
Browse Available Yachts | Contact Us | hello@frontieryachting.com | +32 487 22 08 22
