Compulsory Vessel Insurance

Podgorica 19th July 2019

Vessel owner or user is obliged to sign liability insurance contract – the use of vessel without insurance contract is forbidden – During 20018 about 2,5 thousand vessel liability insurance policies have been issued. 

National Bureau of Montenegro Insurers (NBOCG) this year as usual in the heat of nautical season reminds all vessel users and owners that, pursuant to Law on Compulsory Traffic Insurance, an obligation to insure vessels for damages sustained by third parties has been prescribed. Article 37 of this Law clearly defines that vessel owner or authorized user, registered in vessel register is “is obliged to sign third party liability insurance contract against injuries, impaired health or death.”

This Law also clearly defines: “The use of vessel without insurance contract is forbidden.”

In order to avoid any misapprehension it is important to note that the coverage provided by compulsory vessel insurance contract significantly differs from motor third party liability insurance policy. Namely, while motor third party liability contract covers both material and non-material damages caused by use of vehicle as regards to compulsory vessel insurance policy it only covers damaged sustained by third parties (swimmers, persons on beach, persons on board of vessel..) as regards injuries, impairment of health and death. Therefore, compulsory insurance does not cover damages caused by use of vessel to other vessel or property. Such damages are within scope of liability of user or owner of vessel and bearing in mind amount of damages that might occur to other vessel, even in course of minor accident, we recommend additional cover for material damages. The additional cover has to be agreed directly with Insurance Company.

Based on data with NBOCG during 2018 about 2.5 thousand vessel compulsory insurance policies have been issued, which is 9% lower than during previous year.

Boris Šaban, executive manager of NBOCG, stated: we warn all vessel owners that avoiding to insurance their vessels will lead to extremely difficult position, since if they cause damages using uninsured vehicle they will have to compensate themselves. Therefore, each owner of authorized vessels user register in vessel register is obliged to sign liability insurance contract. Therefore, we urge all citizens using or planning to use vessels during seasons to sign or renew insurance contracts with Insurance Companies in Montenegro.”

“This provision relates to owners or authorized users of foreign vessels used in domestic waters. The use of vessel in marine traffic is not permitted without insurance contract” – concludes Šaban.