Marine Surveys by Gudgeon & Pintle Marine Surveys, Stephen T. Duncombe, SAMS® SA, New Bern, North Carolina, USA Gudgeon & Pintle Marine Surveys

New Bern, North Carolina, USA
Serving The US East Coast

Stephen T. Duncombe, SAMS® AMS®

Principal Marine Surveyor
Cell: 252 626 3281



Salvage -
It has always been the well entrenched admiralty law of the United States that, as set forth by Chief Justice Marshall in 1804, if property of an individual is exposed to peril or hazard at sea and is saved by the voluntary exertion of any persons whatsoever "[a] very ample reward will be bestowed in the courts of justice."

The concept of salvage is centuries old and can be traced back to Mediterranean traders at the time before Christ.
The modern-day concept of salvage as seen from the point of view of a recreational boater, is rife with misconceptions. Many times I have heard that a particular situation cannot be salvage because:
  1. My anchor was down so it cannot be salvage.
  2. I was on board, or my Captain was on board, so it cannot be salvage.
  3. Never accept a line thrown from the towboat, because that will make it salvage.
With the proliferation of companies such as TowBoat or SeaTow, most boaters have, in essence, a contract of salvage. But how do these contracts go?

The TowBoat towing contract is silent as to what constitutes a simple tow, but the standard rule of thumb is "one boat, one hour". The SeaTow contract is more specific. It states that towing amounts to one boat taking 15 minutes to re-float a boat.

After that the concept of "Salvage" comes into play. In order to establish a valid claim to have rendered salvage services, a salvor must establish three elements: (1) marine peril; (2) services voluntarily rendered; and (3) success, in whole or in part, with contribution to such success by the service rendered by the salvor.

Salvage is the compensation allowed to persons by whose voluntary assistance of a ship at sea or her cargo or both have been saved in whole or in part from impending sea peril, or in recovering such property from actual peril or loss, as in cases of ship wreck or derelict.

So, what is "in peril"? Peril need not be imminent, but can be a boat stranded on the beach: sooner or later the actions of waves and weather will imperil the boat. There is also the concept of environmental damage by oil or fuel discharge. The concept of damage to the environment is equally important in the definition of salvage.

Services are rendered voluntarily. The USCG is in the business of saving boats and mariners, so their services are not voluntary, they cannot demand salvage, same goes, but for different reasons, the US Navy. A fellow boater who hears the distress call and successfully saves the vessel can demand salvage.

The SeaTow and TowBoat contracts would be defined as "Contract Salvage" and the payments are outlined in the contract. But the duties of the tow boat are limited to "one boat, one hour" or thereabout. Once the situation requires more equipment or more time the situation requires a "No Cure, No Pay" contract.

The most widely used contact is the Lloyd's Open Form (LOF). In return for salvage services, the salvor receives a proportion of the "salved value" (the value of the ship, its bunkers, cargo and freight at risk). Since the intent is to induce mariners to respond to distress calls, rewards for successful salvage can be "ample" and would be based on the value of the boat, the weather conditions, and the equipment and skill necessary.

For more information on marine salvage, please see this very well researched and written report at: http://www.safesea.com/salvage/law/salvage_law_index.html.

The most common form of protection against the salvage claim is the boat owner's insurance. Almost all boat insurance policies provide some manner of salvage coverage. The problem comes with the individual insurance company in how they handle the salvage claim. Does a liability only type insurance policy covers salvage? Is there a deductible applied to salvage?

The best thing to do is talk to your insurance agent who handles your boat insurance. Marine insurance is an unregulated line of insurance, and has little standardization to the individual coverage forms. Many of the insurance companies that handle homeowners and automobile insurance also provide boat insurance in an attempt bundle all of the clients' insurance together. What you end up with is underwriters and claims people who know a lot about homeowners and automobile insurance but very little about boat insurance. And less still about the concept of salvage.

Questions to ask your insurance agent:
  1. If I buy liability insurance only is Salvage covered?
  2. Does payment of a Salvage claim reduce the value of my coverage? Say you have a $100,000 agreed value insurance on your boat that washes up on the beach. It gets hauled off the beach by a salvor who demands 20%. The insurance company says the cost to repair is greater than the value of the boat. Does your insurance pay $100,000 to you or $80,000?

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Installed September 14, 2008, Last Revised September 14, 2018 - This site is hosted and maintained by Don Robertson