Why build a yacht to class rules?

This is a question an inexperienced yacht owner, or indeed an ambitious small yacht skipper, may pose when considering building or taking command of their first yacht over 24 meters (78.7 feet) in length. In order to answer the question, you must first understand what is meant by the term “class”.

A classification society is a non-governmental organisation that establishes and maintains technical standards for the construction and operation of yachts and ships. So, in order to be “in class”, a vessel must be constructed and maintained in accordance with the classification society’s rules.

Where it all began

During the 18^th century, classification societies were first and foremost a product of a fledgling insurance industry. At the time, the concept of insurance was still in its infancy and there was little knowledge of those early yacht insurers. As construction methods varied, vessels initially started being classed according to build quality and condition.

The idea gained traction and as a result, the world’s first classification society, Lloyd’s Register, was born. Insurance premiums could, at last, accurately reflect the risks, with higher build specifications and better maintenance being rewarded with lower premiums.

This has since remained the purpose of the classification societies. Yacht owners are able to insure their vessel much easier and cheaper when the insurance provider knows that the vessel is constructed and equipped in accordance with the established rules of a recognised classification society.

Flag and class

Nowadays, class societies are regarded as experts in the technical aspects of vessel construction and maintenance, and have two distinct, but related, roles:

1. To research, establish and apply standards for the design, construction and maintenance of vessels. Known as the ‘rules’ of a society, these standards are highly detailed and technical. They cover the strength and integrity of a vessel’s hull, its propulsion systems and other machinery, and its key safety systems, but excludes all aesthetic or operational elements.
2. To perform much of the statutory inspection work required under international conventions. Historically that work was undertaken mainly for smaller nations with a ship and/or yacht registry, but they didn’t have sufficient expertise or resources to perform all the necessary inspection tasks. These days, it’s common for ship registers of all sizes and capabilities to utilise the resources of classification societies.

The accepted approach is that flag administrations focus their attention on the operational requirements of a vessel, while classification societies, on behalf of the flag administration, focus on a vessel’s conformity to the regulations that pertain to the construction, arrangement and working order of machinery and equipment. This fits well with their core role of verifying continued compliance with the rules, as a considerable number of those regulations are similar, if not identical, to the rules.

Commercial vs pleasure

The SOLAS (Safety of Life At Sea) Convention, a principal instrument of the International Maritime Organisation (the regulatory body of the United Nations for all maritime matters) requires its member states to ensure a minimum level of safety on board vessels flying a member state’s flag, in terms of their construction, equipment and key safety operational matters. It states:

“… ships shall be designed, constructed and maintained in compliance with the structural, mechanical and electrical requirements of a Classification Society which is recognised by the Flag Administration…” (Chapter II-1, Part A-1, Regulation 3.1).

The definition of ships in this regulation is as follows:

“A vessel on an international voyage, either being a passenger ship of any size, or a cargo ship of 500 gross tonnes and above.”

The term ‘cargo ship’ includes any ship other than a passenger ship. The latter includes any commercially operating yacht of 500GT and above. SOLAS goes on to specifically exempt pleasure vessels not engaged in trade.

The UK’s Large Yacht Code (as well as the Malta and the Marshall Islands equivalent codes, to name a few) echoes that same requirement, but extends it to yachts below 500GT (Chapter 4, Introduction).

Existing yachts below 500 GT that were never built to class rules would struggle to achieve compliance without making necessary disproportionate investments in modifications. They are given the option to operate as a so-called Short Range Yacht, meaning they would be confined to operating no further than 60 nautical miles from a safe haven and in weather conditions of no more than a Beaufort force 4.

So, you might think that if an owner’s intention is to use their yacht purely for private means, they don’t have to worry about, or even pay for, compliance with a classification society’s rules.

Alas, it’s not that simple. Consider the following:

• Going back to the origins of classification, the reassurance of the vessel being in class is what will sway insurers, as it is something quantifiable on the basis of years of records and trends analysed.
• Insurance premiums will be cheaper for a yacht that is in class than it is for one that is not. The choice of insurance provider will also be much larger.
• To register a yacht with a particular flag administration, the owner must fulfil a number of prerequisites. One of them is that the yacht is insured, but many administrations also stipulate outright that a vessel is in class in order for it to be eligible for registering.
• Selling a yacht that is registered with a classification society is much more valuable than when it is not. It maximises the potential for sale as it allows a future owner to use the yacht commercially, even if the yacht has not been used commercially before.
• What if the next owner has a different preference for registry? Changing the flag will be easier if the vessel is in class?
• Even if an owner sets out to use a yacht purely for their own private purposes to begin with, what if they change their mind and wish to offer the yacht for charter to paying guests on the open market, perhaps to potentially recover some of the vessel’s annual operating cost?  Again, this is only possible if the yacht is classed.
• Last but not least, owning or commanding a yacht that is built and maintained to class rules should be a reassuring notion, giving an owner, captain or crew member peace of mind. After all, when you think about it, the rules merely provide a minimum acceptable standard, not a superior standard compared with other standards. What price do you put on safety?

In summary, it’s very strongly recommended that yachts should be built to and maintained in class for the following reasons:

1. For yachts intending to engage, or those already engaged, in trade it’s a straightforward regulatory requirement.
2. Classification merely provides a minimum safety standard. It’s in the best interest of owners and captains of commercial and private pleasure yachts that such standards are upheld on any vessel.
3. Obtaining insurance for the yacht will prove to be both easier and cheaper, which in turn, will make registering a yacht easier.
4. The value of a yacht that maintains class shall always remain considerably higher than the same yacht that is not in class.

Want to read more from the Sarnia Yachts team?

• What is corporate yacht ownership and when is it used?
• Social security in Malta post Brexit

Find out more about Sarnia Yachts. Alternatively, you can read further articles on Yacht Registration & Classification.