Industry experts have estimated that insurers could be liable for at least $150 million in claims following the tragic sinking of the Bayesian superyacht earlier this month. The accident, which claimed the life of renowned tech entrepreneur Mike Lynch and six others, occurred when the British-flagged 184-foot-long vessel was hit by a pre-dawn storm while anchored off northern Sicily.

According to reports, the superyacht's hull was insured against physical damage by yacht insurance provider OMAC, along with a consortium of insurers including Travelers Companies Inc, Navium Marine, and Convex. The hull, which was estimated to have a value of around $40 million, was likely insured for a similar amount. In addition, the yacht also had protection and indemnity (P&I) insurance provided by British Marine, which typically covers third-party liability claims such as environmental damage, injury, and death.

Insurance sources suggest that the P&I policy would likely be "several multiples" of the hull policy, potentially ranging from $200 to $300 million. This coverage is expected to include liability payments even if the captain or crew are found to be negligent. The exact amount of the P&I cover is still uncertain, with estimates from experts varying between $100 million and the higher range.

Experts have expressed surprise at the yacht's sudden collapse, emphasizing that it should have been built to withstand severe storms. The incident has further compounded the challenges faced by yacht insurers, who have already endured significant losses from hurricane claims in recent years. Premium rates in parts of the U.S. and the Caribbean have increased by four to five times, leading insurers to reduce coverage due to heightened risks.

Insurers are reportedly re-evaluating their guidelines and risk appetite in response to the increased rates and the surge in severe weather events. The impact of climate change is also expected to further complicate matters for yacht insurers, as it brings about more unexpected and extreme weather patterns.

Notably, some prospective boat buyers have already been deterred by the soaring cost of insurance, with at least four clients changing their minds about purchasing boats. As insurers grapple with mounting losses and uncertainties, the industry faces the need to adapt and address the evolving risks associated with luxury yachts.

OMAC, Travelers, Navium Marine, and Convex have yet to comment on the potential insurance costs arising from the Bayesian disaster.