America's Cup Insurance
INSURANCE OF THE AMERICA’S CUP
In September 2000, Royal & Sun Alliance NZ were approached by the Royal New Zealand Yacht Squadron to provide insurance on the America’s Cup whilst being taken by Tradenz to the Genoa Boat Show in October 2000.
As most yachting people are aware, there are considerable security requirements in both showing and moving the America’s Cup, in accordance with a protocol. Vero Marine's task was to tailor an insurance product to fit with these requirements.
On the 14th March 1997, the America's Cup had sadly been vandalised whilst on display in New Zealand by sledgehamer-wielding Maori activist. The sledgehammer smashed through the display casing and seriously damaged the cup - see the photo below. In the midst of considerable and unwelcome media attention for New Zealand, the cup was flown to the United Kingdom for repair by specialists. (Royal & Sun Alliance and Vero Marine were also involved with the transit of the Cup to the UK for repair).
For this transit to Genoa, one of our first tasks was to establish the current replacement value of the Cup, particularly at the time of the fluctuating New Zealand dollar. This was quickly achieved by negotiation with the Commodore of the Squadron.
A specialist security firm who handle diplomatic protection was used to guard the transit. Two “Close Protection Officers” accompanied the Cup throughout its transit to Genoa. Once it arrived there, the Cup was met by a further two CPO’s who then accompanied the Cup to a secure bank vault. During the duration of the boat show a number of CPO’s provided the inner protective ring, with the outer protection provided by the host’s Genoa police force.
Vero Marine provided a specially constructed transit and display insurance. Cover commenced when the cup was removed from its usual stand “for the purposes of international transit” and ceased on return to the intended display cabinet or secure storage in New Zealand. A maximum sum insured was established in the event of the total or constructive total loss, otherwise insurance was for the cost of best repairs (i.e. the highest practical standard) including reasonable expenses incurred by the New Zealand Yacht Squadron for additional public relations costs, additional air fares or additional security, and a cancellation cover for expenses incurred by the Squadron prior to the Genoa Boat Show as a result of any loss or damage to the Cup prior to departure from New Zealand.
In the event of theft and subsequent ransom, Vero Marine would pay for specialist negotiators, provided by our UK claims operation, based in Manchester. Any theft claim was to be paid within 3 months of the event, and should the Cup be later recovered the claims payment was to be refundable but less reasonable expenses including repairs.
Because of the high sum insured on a single exposure, Vero Marine arranged a specialist reinsurance with Swiss Re. We were able to do this on the detailed information and the specialist solution we proposed and were pleased that our detailed underwriting proposition was accepted promptly.
In the event the transit to and from the Genoa Boat Show, and the display of the Cup whilst there, was a great success and Vero Marine were proud to be able to provide a comprehensive insurance solution.
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