Insurance and nationality?

Hi,

Has a boat told you they can't hire you because you are American by any chance?

Insurance companies can and often do impose a surcharge for American crewmembers.

Is it BS? Yes, but it is not illegal and since captains ask that question on internet bulletin boards rather than discuss the issue with their insurance company, fairy tales such as "insurance companies can tell yacht owners" continues to infect the industry.

Before anyone wastes more bandwidth on the myth about Americans being so litigious, there are more lawsuits filed by British and German citizens than Americans. Look it up.

At the risk of wasting more bandwith...
Insurance companies don't care so much about the number of litigants as they do the size of the settlements and awards and American juries and judges have a reputation (deserved or otherwise) for being excessively generous. Secondly Insurance companies care about the nature of the lawsuits. In the case of crew they would care about personal injury and medical costs and employment disputes (harrassment, conditions, termination etc). In addition the medical costs retated to American crew would be reckoned to be higher and unlikely to be offset by a national health scheme (at least until recently). My international insurance buddie tells me that the majority of European and British lawsuits are about the astonishing complexity of land law and property rights in those areas or the law of contract. When you factor out land/property/contract (not labor) disputes he says the Europeans don't seem to sue each other as much as we North Americans do and the settlements are almost always smaller.

So why does the insurance company reckon the American is going to pay more?

If an American sailor were injured in France, he or she would receive medical treatment in France and pay a French bill. If an Australian sailor is injured in Florida he or she will receive medical care in Florida and be billed at the same rate as an American. There are more foreign crews exposed to the American medical industry than American crews so, actuarilly, Americans should receive a premium reduction.


The whole thing is BS and every agent knows it is BS. This rates right up there with the insurer not approving a captain to go from a 50 meter boat to a 55 meter without regard to the type and source of training while happily approving another captain whose license didn't qualify him for the tonnage of boat he was operating in commercial charter. If the insurance companies were actually tracking their risks they would audit the boats to determine their exposure rather than just apply a surcharge because it generates a tiny dose of pure, risk free, profit.

And, for what it's worth, the surcharge really isn't very much, a few hundred dollars a year, but the damage it does to Americans in the large yacht industry is huge.

When a crewing agency makes that statement, it is being incredibly disingenuous at best. The person who calls the agency to request crew CVs might well specify that they are not seeking American applicants, but stating that there is an an insurance company prohibition is an outright lie. In most cases the insurance company is an American company that underwrites American vessels as well as foreign flagged yachts and they don't turn down American business. In some cases, the underwriter may specify a limit on the number of Americans beyond which an additional premium may be charged. The owner may choose not to pay additional premiums and limit the number of American crew, but the amount is so small that I doubt if anyone other than the captain even knows about it. In fact, I wonder if the captain even knows anything more about it than having heard in a bar that insurance companies prohibit the hiring of Americans and that suits him just fine.


I am sure that there are in fact many captains or management firms that actively participate in the continuation of this form of discrimination. Many owners may not even be aware of the practice that is maintained by ignorant and biased captains and crew agents. I will not be party to this particularly disgusting aspect of the yacht industry. Since I personally review CVs from all engineer applicants, I make it a point to forward qualified American candidates to vessels that are in American ports. The additional premium for an American is far less than the price of airfare from some corner of Eastern Europe so the exclusion of Americans cannot be justified by any financial consideration on the owner's behalf. It is purely ignorance and bigotry.

It would be nice if an insurance professional would weigh in on this since they are the only ones who have access to the range of facts which apply to various underwriters.

Simple answer to this is that all insurance companies whose home offices are not in the US should be boycotted on ALL insurance lines they sell and all US investors in those companies should sell out. That should balance things out.

I think it is based on legal reasons. For example a US documented vessel legally under the US flagstate has to hire and have US crew. There are few exceptions if you look in the CFR's. If the crew is not legal for the flagstate, then they cannot legally insure the crew most likely.

As for non-US companies insuring US vessels. Thats actually a good thing. For example Lloyds of London is about the only company insuring vessels in the south (US) during hurricane season right now.

Not even close. Just for grins let us know how many countries you can find with laws that restrict the nationality of crew members on vessels flying their flag. How many of those countries are represented in the yachting industry?

And there is a big difference between hull, P&I, and crew insurance.

I havent fully researched but have heard on multiple occasions (from captains, crew agencies, and brokers) that us-flagged boats have restrictions on crew and/or captain nationalities... is this not the case at all? (specifically, iirc i heard that the captain of a yacht flying a US flag has to be an american, which is, frankly, a deal-breaker for many many owners who are unwilling to part with their trusted captains in order to fly a us flag, when they can jsut as easily - perhaps even easier - fly another flag and not have a restriction)...

Again, i didnt fully research this, so it is BS or is there any restriction at all?

That's a country protecting jobs for it's citizens. Far different than an insurance company maximizing profits. Most countries limit what foreign workers can and can't do and under what circumstances. If they didn't they would be taken over; literally. The U.S. also insists that the president be a U.S. citizen. I'll guess that you understand why.

Yes it's true, a US documented vessel has to have all US crew except if in a foriegn country they are allowed to take on a non-us citizen for a temporary position, but must be replaced by a US crewmember in the first US port. Look up 46CFR 15.720

Another reason is most US Documented vessels with fulltime crew are owned by a US Corporation. It would be illegal for a US Corporation to hire someone that doesn't have working papers (greencard etc.).

Born and bred not naturalized from what I understand.

If that Vessel is not returning to a US port then the position can be filled by a foreigner for an indefinite length of time apart from Master and Radio Officer ( who actually carries one of those these days anyway?)

Work Visa

I had this problem several times when Yachts looking for Crew.
Most Captains on non US flagged Yachts ask for Non US Crew.

Most Insurance company's are afraid about irregular high claims from US Crew members and therefor its much easier for them to deal with non US claims.
( did you remember the Mc Donalds hot coffee story )

I currently have a request for Crew for a US flagged 80m Yacht and have to
search for US Crew or also for Crew with C1/D1 US working Visa no chance for others. ( Thats not a Job offer here !! )

But there are also other discriminations.
For example MCA certificates.
Tell me just 1 European Country except the UK
where you can get a driving license ( Captain ) or a engineer license for commercial registered Yachts > 24m load line ?? Good luck.
I am not talking about commercial papers with a nautical study !

Isn't it also a part of discrimination when you have all national papers that allows you to drive any Yacht but if you sail on a Red Ensign flagged Yacht you have to start from Zero with your Yachtmaster certificates ??

Since 5 Years I am working on a European solution and International recognized Papers for Captains and Engineers. A nightmare I tell you.

Hi,

I find it a surprise that you who bang on about the professionalism of your operation don't seem to know much about the US Visa System.

A C1 Visa is not a working Visa. It is for the Holder to land in the US and transit to a foreign destination.

http://faq.visapro.com/C1-Visa-FAQ2.asp#Q2

A D1 Visa entitles Crew Members to land in the US and join/depart their ship or aircraft.

Neither gives the holder a right to work on US Flag yachts in the US.

http://faq.visapro.com/D1-Visa-FAQ2.asp#Q3

Well I'm all for protecting the local jobs, but as a Yacht owner, having a restriction of this sort is kind of a deal-breaker for me... I'd much rather have a Captain from Canada/US/UK/Australia/Wherever, an Italian or French chef, a Chief Stewardess from my home country, which preferrably works with my family for several years, and so forth...

I agree in theory with the logic behind it, nonetheless, from a yacht-owner's (or captain's since he is often the one responsible for pulling it together) perspective it isnt realistic to expect people to be happy with this restriction. I can fully back this up for a company doing business in the US, that is an entirely diferent story... but a yacht?

Unless there is someway around (or some change to such a rule) I'm afraid I and surely others would definitely stay clear from US flagging a boat and this is one of the reasons (there are a few others, which today incline me to prefer other flags, but this one always pops to mind as a deal-breaker... others are "inconveniences")...

I'm not saying I'm against US crews... Not at all, I've had extremely good experiences with US crew, Canadian crew, South African, etc... And who knows, maybe one day we might even have an All American crew, but I wouldnt like to not have the option...

In terms of insurance though, I really dont see the difference..... I could agree that americans have a fame for "frivolous" litigation, but I could easily point out much more dishonest people from other nationalities (I wont, as it isnt fair to generalize), and we dont see them being mentioned at all here....

I think things should be played out on a case by case basis... If I really wanted a US officer or engineer, I'd have my captain push the insurance agency until they could give me a good reason for refusal, other than nationality....

Gov. Arnold from California tried to get around that a few years back...unsuccessfully. Personally, I think the Govs. office is a bit high for non-born & bred, but it's not my call.

A U.S. flagged yacht is considered a potential military vessel if the need arises. Beyond that the laws position is: who cares if they're happy.

I doubt this is more than the slightest consideration in deciding where to flag. The decision is usually based on taxes...$$$ and that may be changing rapidly thanks to Florida's new tax rules.

Could all this talk be a back-door attempt to create more jobs in the industry for foreign (cheaper) workers at the expense of American workers? If so it could definitely backfire. Maybe it's time for U.S. yachtowners (no matter what flag they fly) to show loyalty to their county and hire nothing but U.S. crew. DK if it would or wouldn't happen, but it's an interesting thought.