What Is the Sue and Labour Clause in Yacht Insurance?

What the Sue and Labour Clause in Yacht Insurance Really Means for You

The Sue and Labour Clause in your yacht insurance helps pay for the costs of trying to save your boat when it’s in danger. It covers reasonable expenses you or others incur to prevent a total loss, like hiring a tugboat or using equipment to refloat your boat after a grounding.

What the Clause Actually Covers (and What It Doesn’t)

The Sue and Labour Clause is part of your hull and machinery cover, which protects your boat’s physical structure. If your boat runs aground or starts taking on water, this clause pays for actions you take to save it—like hiring divers to inspect the hull or using a crane to lift it off a reef. However, it won’t cover actions that are reckless or clearly hopeless (e.g., trying to save a boat already submerged in 20 feet of water).

How Salvage and Wreck Removal Tie Into This

If your boat is damaged and needs help from a salvage team, the Sue and Labour Clause often covers those costs. For example, if a professional salvage crew is hired to pump out water or tow your boat to safety, your insurer will reimburse you (up to policy limits). Later, if the boat is declared a total loss, the insurer might also handle wreck removal—like dismantling the boat if it’s stuck in a sensitive environment. These expenses are separate from your agreed value payout for the boat itself.

General Average: Sharing the Burden

In rare cases, like a storm where multiple boats are at risk, the general average principle might apply. If you jettison cargo to save your boat, or if a tugboat helps multiple vessels, the costs could be shared among all parties involved. Your insurer will step in to cover your share of these costs under the Sue and Labour Clause, but only if the actions were necessary and proportionate to the risk.

• Hiring a professional diver to inspect or repair underwater damage after a grounding.
• Using a crane or heavy machinery to refloat your boat stuck on a sandbar.
• Paying a salvage company to pump water out of your boat after a hull breach.
• Covering the cost of a tugboat to move your boat out of a restricted area during an emergency.

Takeaway: Review your policy’s exact wording for the Sue and Labour Clause. Know that it’s designed to help you save your boat, but only for actions that are reasonable, necessary, and not already covered under other parts of your policy (like protection and indemnity for crew injuries).