Cuba has long been a forbidden fruit for U.S. yachtsmen. After all, this largest of the Caribbean islands is located less than 100 miles from Key West, Florida.
This opportunity opened up nearly two years ago when President Obama announced policy changes making it easier for Americans to visit Cuba. Sailors and sports fishermen, owners of small family yachts and megayachts, are all interested in making the trip.
The logical next question is how to obtain insurance that covers a private vessel in Cuban waters. This has been elusive since regulations under the U.S. Department of the Treasury, that controls contact with Cuba, hasn’t permitted U.S. insurers to offer this product – until now.
“I get questions on this topic frequently,” says Wally Moran, writer and co-author of the Cuba cruising guide, Cuba Bound. “Insurance is, in my opinion, the number one issue stopping boaters from going to Cuba on their own vessels.”
Yacht insurance for Cuba is not new, says Joe Kolisch, president of Kolisch Marine Insurance, Inc., based in Coral Gables, Florida. “There has always been a market for Cuba. The hard to place surplus line companies, like those in the London market, have placed this for years. But insurance through standard market carriers hasn’t been available.”
This changed in June when Pantaenius America Ltd., a German-owned marine insurer with a U.S. division based in Harrison, New York, made the groundbreaking announcement that it would offer coverage for U.S. boats cruising in Cuban waters.
“We undertook the effort to offer insurance to Cuba because we always try to accommodate yacht owners to allow them to navigate where they want to,” explains Cary Wiener, president of Pantaenius America. “What was stopping us before was the legal restriction. Our sister company in Europe had no such restriction and has been insuring yacht owners traveling to Europe all along. Therefore, we, as a group, have the required experience to support yacht owners desiring to go to Cuba.”
The first step in obtaining insurance is to self-qualify under one of 12 Department of the Treasury-authorized licenses that allows Americans to visit Cuba.
Some of these include amateur and semiprofessional international sport competitions; public performances, clinics, workshops, other athletic or non-athletic competitions and exhibitions; professional meetings; educational activities; and humanitarian projects.
In addition, U.S. vessels less than 328 feet in length need a Coast Guard permit. This means filling out the CG-3300 form, Application for Permit to Enter Cuban Territorial Seas, and submitting it to the Seventh District headquarters in Miami.
“We have an endorsement that needs to be signed for insurance to Cuba. No documents need to be filed with the US for permission to travel to Cuba as long as one fits into one of the 12 licenses, but Cuba may require documents, and the client is advised to sort out the documentation carefully and plan ahead,” says Pantaenius America’s Wiener. “For us, this process takes less than two working days and usually can be completed the same day.
Pantaenius has no separate restrictions about the type of yacht it offers its Cuban endorsement other than what vessels would normally need to qualify for the company’s Florida or Caribbean requirements for underwriting. The cost of the additional Cuban coverage averages an additional 10 percent of boat’s total premium with a $500 minimum. This cost covers a 14-day period, the maximum period of time annually that a US vessel can remain within Cuba without a special BIS (Bureau of Industry and Security) license.
“There are very limited marina facilities for yachts in Cuba, and they require reservations. There are almost no facilities to properly perform serious repairs to the yacht. Sometimes we have to fly in repair crews and supplies in order to make even temporary repairs before the vessel can be brought back to Florida for permanent repairs. This is the reason for the small additional premium,” says Pantaenius America’s Wiener.
Going forward there will be more competition and a handful of major U.S. carriers may soon start underwriting insurance for Cuba.
“What I think we’ll see is Cuba becoming like other countries such as Colombia, Haiti and Venezuela where exclusions and warranties will include double the deductibles while in these countries’ waters, exclusion for confiscation, and exclusion for theft unless a vessel is moored within a commercial marina previously agreed upon,” says Kolisch.
“I don’t know that there would be different claim issues in Cuba other than the aforementioned exclusions for theft, which are not to my knowledge the norm in other countries. That being said, Cuban marinas are quite secure and theft of property from a boat, or a boat itself, is generally unheard of,” says Cuba Bound’s Moran.
“As for navigational issues, if the skipper remains, as do most, in the marina there won’t be any problems. However, cruising the Cuban coast does demand navigational skills that many boaters do not have such as the ability to navigate more competently than just by looking at a chartplotter and pointing the boat.”