Builder/purchaser Insurance

[karlT]

This question is not intended or directed at any specific boat builder and is a general request for information!!

I am having a new boat built and want to ensure my payments are protected should the company go into liquidation and its assets are seized during the build stage. The agreement between myself and the purchaser says that I own as much of the boat as has been built and any items purchased for the build that my stage payments cover.

However, should the worst happen, I would not be in a position or capable of collecting a hull stuck in a mould with the rest of the build to complete and £20k plus of stage payments being spent by the directors of the company on their new spanish villa.

In all probability the whole process should be smooth and painless, however after hearing many horror stories I am after some advice from any of you that have had difficulties in the past.

Also, should the build take much longer than the initial date agreed at what point does this become an issue (I do not intend making many changes or requests during the build as my specification is fairly stringent)

Many Thanks

KarlT

[John Kennett]

The BMF (British Marine Federation) have a standard contract that might be worth looking into. I don't know how you get a copy if you're not a member (is your manufacturer a member?), but contact details are on their web site: www.britishmarine.co.uk

John

[karlT]

Thanks, that is the contract we have both signed.
It is very basic and am sure would not hold much ground should the company go into administration. I would be left with a half finished boat and have to prove ownership of any assets.

[PeterM]

I'd suggest speaking to a specialist credit insurer. its an odd risk , but really you just need to cover the risk of the company ( builder) going into administration etc & not delivering. Builders often have to take out a bond to cover a similar risk if they are building & go out of business & cant complete the project. Maybe start with marine broker & ask them if they have someone they use . Cant think of anyother way around it. I'll speak to a few 'in the know' & get back to you as its something I used to arrange for job!

[MikeCC]

How easy is it for you to get to see the work in progress?

You can then take a view as to whether the stage payment represents a reasonable value for work completed. (This goes for checking progress against schedule as well). Obviously doesn't get round the problem of a half-finshed boat and no company.

Get serial numbers of any equipment that you have specifically paid for.

Blackroady's suggestion is good but cost may depend on the financial state of the company. If it's a limited company, pull their accounts from Companies House - it's only 3 or 4 quid online.

[John Kennett]

Originally Posted by karlT

Thanks, that is the contract we have both signed.

It may not be ideal, but you're probably way ahead of most people who don't seem to have any formal contract when they have a RIB built!

John

[karlT]

Thanks for your help.

I am in the process of putting insurance in place to cover the build process until the boat is built and delivered.

The 1st stage payment is Circa 10k (35% of overall finished value) which is due 4 weeks before the boat is started. (this is probably my most risky period)

The 2nd payment (30% of value) is due when all hull and mouldings are complete or when engines are ordered (in my case the engine is stored in my shed off my previous boat) This payment does not seem unreasonable as the boat will be 70% ish complete with only stainless rails , bonding, SS keel band and winching machinery to fit. The value / stage of build will be commensurate with the payments I have made.

The final payment of the remaining balance is due 1 week before vessel is available for collection / delivery.