Category: Marine insurance · Reviewed by Simon Temme, Account Executive · Last reviewed 2026-06-05
Ship repairers liability insurance, often shortened to SRL, covers a repair yard, drydock operator or marine engineering firm against legal liability for physical loss of or damage to vessels and equipment in its care, custody and control during repair, conversion, refit or routine maintenance.
Category: Marine insurance Also known as: ship repairers’ liability, SRL, ship repairers legal liability First codified: market wordings developed by Lloyd’s and the P&I clubs from the mid-20th century Related legislation: Marine Insurance Act 1906 [1]; Supply of Goods and Services Act 1982 [2]; Occupiers’ Liability Act 1957 [3]
A ship repair facility takes responsibility for vessels brought into its yard for repair, refit, drydocking or conversion. The repairer’s standard terms of business — typically a variant of the BIMCO Repaircon, the Shipyard Conditions of the Confederation of British Industry, or the yard’s own bespoke conditions — define the contractual allocation of risk between yard and owner. SRL insurance covers the yard’s residual legal liability for physical damage to the vessel itself, to equipment removed from the vessel and held in the yard’s storage, and to third-party vessels and property in the dock or adjacent waters [4][5].
The risk profile of a repair yard is distinctive. The yard does not own the vessel but bears the risk of negligently causing damage while it is in the yard’s possession. Common loss scenarios include fire during hot work, blocks collapsing in drydock, damage during undocking, contamination of fuel or coatings, electrical malfunction during testing, damage during sea trials of repaired or modified equipment and asbestos-related health claims arising from older vessels [4].
SRL is conceptually distinct from yard property insurance (which covers the yard’s own assets — buildings, plant, machinery), from yard liability cover (third-party personal injury and property exposures unrelated to vessels in care) and from public liability for visitors to the yard. A typical repair yard programme includes all of these covers plus employers’ liability, motor (for yard mobile plant) and marine cargo cover for materials in transit [5].
The yard’s liability arises principally in contract (under the repair agreement, often modified by yard standard terms) and in tort (negligence in the conduct of repair work). The Marine Insurance Act 1906 recognises the yard’s insurable interest in respect of liabilities incurred in relation to vessels in its care under s.5(2). The Supply of Goods and Services Act 1982 implies a term that services will be carried out with reasonable care and skill (s.13), forming the baseline duty of care owed by the yard [1][2].
The Occupiers’ Liability Act 1957 imposes a common duty of care on the yard as occupier in respect of visitors (including the crew of vessels under repair), and the 1984 Act extends a more limited duty to other entrants. The Health and Safety at Work etc. Act 1974 and supporting regulations apply to yard operations, with the Health and Safety Executive and (in maritime contexts) the Maritime and Coastguard Agency exercising regulatory functions [3][6].
Standard repair contract wordings typically contain knock-for-knock allocations of risk for personal injury and property damage, with each party bearing its own losses regardless of fault. Sophisticated yard conditions also limit liability for consequential loss, loss of profit, demurrage and similar indirect heads of damage. SRL underwriters expect to see the yard’s standard conditions and may discount premium for tighter contractual risk allocation [4][5].
SRL cover is normally arranged on an annual basis with a per-occurrence and aggregate limit reflecting the maximum value of vessels that the yard could have in care at any one time. For a small UK repair yard handling coastal trade vessels, limits might be £20m–£50m; for a major drydock complex capable of handling VLCCs or cruise vessels, limits commonly extend to several hundred million pounds. The cover responds for legal liability up to the policy limit, with a deductible per occurrence and reinstatement provisions for the policy aggregate after a claim [4][5].
Underwriters require detailed disclosure of the yard’s facilities (number and dimensions of drydocks, depth of water, lifting capacity, fitting-out berths), the typical mix of vessels handled, the proportion of high-risk operations (hot work, tank cleaning, conversion, propeller and rudder work), the experience and qualifications of the workforce, health and safety record, and the contractual terms on which the yard accepts business. Yards with a high proportion of agreed-value contracts and tight standard conditions can secure significantly better terms than yards that accept liability on customer-friendly conditions [4].
Major losses typically involve insurer-appointed surveyors, average adjusters where general average applies, lawyers representing the yard and lawyers representing the vessel and its underwriters. Subrogation actions against the yard from vessel underwriters are common and SRL cover responds for defence costs and any judgment or settlement up to the policy limit. The product accordingly functions as both an indemnity for adverse judgments and as a defence fund for the yard’s legal team [4][5].
Drydock liability is a more narrowly drawn cover for the specific exposures of dock operation (block collapse, undocking damage, water management failure). Some yards prefer the narrower cover at lower premium where the bulk of the work is straightforward drydocking rather than complex repair or conversion.
Wet repair or afloat repair specialists (carrying out repairs at the customer’s berth or anchorage rather than at a yard) face a different risk profile and use modified SRL wordings, often with restricted limits and explicit exclusions for towage to and from the work location.
Yards undertaking conversion work — converting a tanker to an FPSO, converting a cargo ship to a passenger vessel — typically buy additional contract works cover to address the increased complexity and value, with the project-specific cover sitting alongside or replacing the annual SRL programme for the duration of the project.
A UK ship repair yard operates a 200-metre drydock at a south-coast port handling RoRo ferries, offshore support vessels and coasters. Annual turnover is approximately £18m and the maximum exposure at any one time (taking the largest vessel the yard accepts in dock) is approximately £80m. SRL is placed for £100m any one accident or occurrence on a market wording, with a £25,000 deductible per occurrence. During a routine 5-year docking of a customer’s RoRo vessel, hot work on a fuel pipe causes a fire in the engine room that damages the vessel and delays redelivery by 11 weeks. The SRL policy responds for the vessel underwriter’s subrogation claim for hull damage and for the customer’s claim for loss of earnings, subject to the deductible and to the limitations in the yard’s standard conditions. Figures in this example are illustrative.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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