Why Build a Yacht to Class Rules?

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 in length.

To answer the question, one must first properly understand what is meant by the term “Class”.

A Classification Society (of which there are more than just a handful) is a non-governmental organisation which establishes and maintains technical standards for the construction and operation of yachts and ships. So, 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 18th 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 the knowledge of those early insurers about the ships they underwrote was less than perfect. 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 remained the purpose of the Classification Societies until this day.  Yacht owners are able to insure their vessel much more easily (and cheaply) when the insurance provider knows that the vessel is constructed and equipped in accordance with the long-established rules of a recognised Classification Society.

Flag and Class

Nowadays, Class Societies are regarded as experts in the technical aspects of ship and yacht construction and maintenance, and have two distinct but related roles:

The first is 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 and cover the strength and integrity of a vessel’s hull, its propulsion systems and other principal machinery and key safety systems but excludes all aesthetic or operational elements.

Their second role is to perform much of the statutory inspection work required under international conventions. While historically that work was undertaken mainly for smaller nations that maintained a ship and/or yacht registry but did not have sufficient expertise or resources of their own to perform all the necessary inspection tasks, these days it is commonplace for Ship Registers of all sizes and capabilities to utilize the resources the Classification societies can provide.

The accepted approach taken is that Flag Administrations mainly focus their attention on the operational requirements of a vessel, while Classification Societies -on behalf of the Flag Administration- focus on a vessel’s conformance to the regulations that pertain to the construction, arrangement and working order of machinery and equipment. This is a natural fit with their core role of verifying continued compliance with the Rules, as a considerable number of those regulations and are similar if not identical to the Rules.

Commercial vs Pleasure

The SOLAS (Safety of Life at Sea) Convention, which is the 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, clearly states that:

“…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

With the definition of ships in this regulation being 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, meaning the latter includes any commercially operating yacht of 500 GT and above. SOLAS goes on to specifically exempt pleasure vessels not engaged in trade.

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

Existing yachts below 500 GT that were never built to Class Rules and which would struggle to achieve compliance without making disproportionate investments in modifications necessary, 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 (wind strength) conditions of no more than Beaufort force 4.

So, 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”, you might think.

Alas, it is not that simple. Consider the following:

• Going back to the origins of Classification, the reassurance of the vessel being in Class is what will hold more sway with insurers, as that is something quantifiable based on years of records having been kept 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 several prerequisites. One of them is that the yacht is insured. But many Administrations also stipulate outright that a vessel is in Class 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 minds 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, that is only possible if the yacht is Classed.
• Finally, owning or commanding a yacht that is built and maintained to Class Rules should be a reassuring notion, giving an Owner, Captain or Crew peace of mind. After all, when one thinks about it, the Rules merely provide a minimum acceptable standard, not a superior standard compared with other standards; there aren’t any others… What price to put on safety?

In summary:

It is very strongly recommended that yachts should be built to and maintained in Class for the following reasons:

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

Please note that this article is intended to provide a general overview of the matters to which it relates. It is not intended as professional advice and should not be relied upon as such. Any engagement in respect of our professional services is subject to our standard terms and conditions of business and the provision of all necessary due diligence. © Praxis 2023