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Home > Legal & Financial > Charter and Insurance

Charter and Insurance

 

You have a non Spanish flag commercially coded vessel and want to charter it here in the Balearics. You address your local insurance company asking if everything is ok from their part and they say yes. Well, this might not be really the case as the insurance policy alone as such is not sufficient for the charter license.

 

According to art. 6.1h from the Balearic Order from the November the 6th 2007 that rules the charter activity in the Balearics, Orden de la Consejería de Obras Públicas, Viviendas y Transportes de 6 de noviembre de 2007, for the application of a charter license at the Conselleria de Turisme i Esports of the Balearic Government you have to file among other paperwork Certificate by the insurance company stating that the vessel fulfils the requirements of the Spanish compulsory insurance in two aspects :

 

 

  1. The obligatory civil liability insurance according Royal Decree Real Decreto 607/1999 de 16 de Abril, por el que se aprueba el Reglamento del seguro de responsabilidad civil de suscripción obligatorias

 

  1. The obligatory passengers insurance according Royal Decree el Real Decreto 1575/1989, de 22 de diciembre, Reglamento del Seguro Obligatorio de viajeros, that includes the minimum amounts to be covered in case of accidents

 

 

This certificate has to be issued in Spanish or translated into Spanish and has to mention specifically both Spanish Royal Decrees. The insurance policy, the contract, the general conditions or receipt of payment are not enough you have to provide the certificate otherwise there is no charter license. And here comes the main pitfall. . If your insurance company has an office or a broker here in the Balearics or in Spain normally there is no problem as they have such a model of such certificate and can sign and stamp it immediately. However, if the insurance company has absolutely no contact with Spanish offices, subsidiaries or brokers we can have a problem as the foreign insurance companies are quite reluctant to issue such a certificate and refuse to mention the Royal Decrees. They start involving their legal advisers and the foreign lawyers probably will argue that they do not know the details of the Spanish Law. And as the Balearic Authorities are very strict in this point and in the wording and require to express specifically both Royal Decree we have even seen cases in which the ship owners had to contract a second insurance policy in Spain just to get the proper wording in the certificate.