The Difference Between Towing and Salvage

Boating is fun most of the time, but once in a while the seagull hits the fan and even the most experienced skippers need a little help. With luck, that’s just a tow back to the marina or boatyard or launch ramp. In days past, the tow was often courtesy of the U.S. Coast Guard, or a Good Samaritan fellow boater who asked nothing but a thank you and a friendly wave as he motored away. That was then—nowadays, you’ll more likely end up in the hands of a professional tow captain looking for more than just gratitude. Sometimes a lot more, depending on the circumstances: If a tow becomes a salvage job, the costs can skyrocket.

Marine salvage isn’t piracy, but it can seem like it to skippers unfamiliar with the rules of the game: Salvage can cost a lot of money. Why? While towing someone home is usually a simple procedure, and one covered by membership with Sea Tow, TowBoatUS or another commercial towing company, saving a boat that’s on the rocks, or sinking, or otherwise in peril takes training, expertise, experience, specialized equipment and, sometimes, courage. Heading out into a storm in a rugged RIB to fetch someone’s broken-loose cruiser, or deploying a crash pump in heavy seas to dewater a trawler on a one-way trip to Davy Jones, isn’t a job for milquetoasts. The folks who do it deserve to get a fair reward for saving boats often worth hundreds of thousands, sometimes millions, of dollars. The reward can be as much as the value of the vessel saved. (The U.S. Coast Guard is still the go-to agency for saving lives on the water; nobody does it better. But since the early 1980s the U.S.C.G. has been out of the routine towing and salvage business.)

Not all salvage involves derring-do, but even easy salvage jobs can result in big rewards, too. The value of the saved vessel is usually the basis for rewarding the salvor; the amount of the reward often determined through binding arbitration or the courts. A reward of as little as 10 percent of a salvaged vessel’s value can mean a five- or even six-figure boost to the salvor’s bank account. Owners slapped with a bill like this turn to their insurance company, which fights in court to knock down the reward. Most marine insurance policies cover salvage costs, often without deductibles. If your policy doesn’t, stop reading now and get one that does. (Because salvages frequently involve insurance companies, lawyers and litigation, towboat captains and industry honchos spoke with me on the condition of anonymity, to avoid future negative impacts to their careers based on the contents of this article. I didn’t know Power and Motoryacht was so influential!)

Is It Towing, or Salvage?

What is salvage, anyway, and how are its rewards determined? When does towing become salvage? The International Maritime Organization’s International Convention on Salvage 1989 (SALCON 89) presents guidelines that apply to salvage in any of the 175 IMO member states; the U.S. has been a member since 1950. Most reputable salvors, whether they’re saving a supertanker or a trailerable center console, recognize the authority of SALCON 89. The document can be downloaded from the internet; it’s not long, and is clearly written. You don’t need a degree in maritime law to understand it.

SALCON 89 defines salvage as “any act or activity undertaken to assist a vessel or any other property in danger in navigable waters ….” The key word here is “danger”—the IMO doesn’t use the term “peril,” as many U.S. towing companies do, but the meaning is the same. “Peril” is a flexible term: If your boat’s broken down and drifting, or being wind-driven slowly toward a rocky shore, is it in peril? If so, the towboat that comes to pick you up is, according to SALCON 89, performing a salvage operation.

With most towing companies, an annual membership provides coverage for, typically, simple towing, jumpstarts, fuel drops and soft groundings—but not salvage. BoatUS considers towing as “any operation not involving immediate peril to the boat or to a legally protected marine environment and requiring no special equipment.” Of the roughly 100,000 requests for on-water assistance from TowBoatUS in a typical year, 95 percent are completed with one towboat and one towline, and covered by the membership fee. About half result from mechanical breakdowns, followed by grounding, electrical and fuel issues. The average out-of-pocket cost to non-BoatUS members is $960.

Anything beyond one towboat and one towline can be considered salvage, and costs extra. For example: an intake hose bursts, the associated seacock that hasn’t been exercised in a decade won’t close, and a geyser of seawater is filling the engine compartment way faster than the bilge pump can discharge it. Or the wood-cored transom that’s been soaking up water since the boat was launched finally cracks under the stress of multiple outboard motors and water pours in. Or the boat starts sinking at the dock for whatever reason. In each case, the salvor will use a portable pump to de-water the boat while towing it to the nearest TraveLift, and maybe add a couple of flotation bags, just in case. Since equipment other than a towline is needed, this is now salvage, and the fee is generally determined by the value of the vessel and other factors. How do you know if the towboat coming to your rescue regards the job as towing or salvage? “Ask them,” said one towboat captain I spoke with. “No question is too dumb to ask—know what the score is ahead of time.”

What Will It Cost?

So, you’re standing in the cockpit of your boat with water rising above your ankles. The towboat comes alongside with pumps and flotation bags at the ready, maybe diving gear in case someone has to go overboard and plug a hole, etc. But first the captain hands you a clipboard with an official-looking form on it, asking for your signature. Many salvors use the U.S. Open Form Salvage Agreement (MARSALV) written by the Society of Maritime Arbitrators, or Lloyd’s Standard Form of Salvage Agreement—usually called Lloyd’s Open Form—or some variation thereof. This will be the contract for saving your boat, or trying to. By signing it you agree to pay for the salvage, even though in most cases you don’t know what it will cost; that will be determined after the salvage is successful. Some salvors will charge an agreed fixed fee, or as cost-plus; those options are on the MARSALV form. You really don’t have much leverage to negotiate if you want to save your boat.

Salvage is usually carried out on a “no cure, no pay” basis, if not agreed otherwise and noted on the form. If your boat is lost despite the best efforts of the salvor, you don’t owe anything. Unless, that is, he prevents the fuel, oil and other contaminants aboard your boat from damaging the environment, in which case he can charge you for that. If he saves your boat and the environment, he can charge for both. If your boat is not saved, you will still be liable for disposing of its wreckage, which most salvors will do for a fixed fee. Although the open form states that the salvor will have a lien against the saved vessel until the bill is paid, taking possession of the vessel is legally complex and expensive. Salvors don’t want this—they just want to get paid.

SALCON 89 lists the conditions for being paid for the salvage and the “criteria for fixing the reward.” Some of the criteria are the saved value of the vessel and property; the skill and effort of the salvors necessary both to save the vessel, and to prevent damage to the environment; the success of the salvage; the degree of danger involved; time and expense incurred by the salvor; and liability and risks assumed by the salvor: When a licensed professional salvor attempts to salvage a vessel, or simply takes a broken-down boat in tow, he/she assumes liability for the vessel. “From the time I pass the towing bridle to when I make the boat fast to its dock, I’m responsible for it,” said one towboat captain. Fellow boaters just trying to help out are protected from liability by Good Samaritan laws, which vary from state to state, he said adding. “But if you take any kind of payment for the rescue, even a six-pack of beer, technically you’re opening yourself up to liability, as well as breaking the law, if you’re not licensed.”

Greed Goes Both Ways

Sometimes salvors get a little bit greedy. A few minutes searching on the Internet will dredge up enough horror stories to keep you in your slip. For instance, in 2017, the captain of an upscale center-console fishing boat underway to Key West found water leaking into the boat through live-well plumbing. The boat’s owner had membership in a towing company, and a towboat met him in a harbor along the way; it took about 10 minutes to pump out the water, according to an article on the Passagemaker magazine website. (Passagemaker is a sister publication to Power and Motoryacht.) The captain signed the salvage form, and the owner of the boat received a $30,000 bill, the amount determined by the salvor. The boat owner and his insurance company claimed that since the center-console was in port and not in peril, this was not salvage. After negotiation, the reward was eventually reduced to $13,000.

Sometimes it’s the boat owner who tries to pull a fast one. A captain I interviewed at length told of getting a nighttime phone call on Labor Day weekend from a man whose boat was sinking in its slip. The captain said he would come over with a pump and arrange for a nearby yard to pull the boat, even though it was after hours. The owner didn’t want that; he wanted a free tow under his membership contract. “He was afraid pumping the boat out would raise his insurance rates.” Instead, he asked the captain to tow the boat to a nearby beach so he could repair the leak himself. Naturally, the captain refused—deliberately grounding a boat is frowned on by the authorities—and the owner eventually beached the boat under its own power. He must have done it at low tide, since a couple of subsequent high tides flooded the boat, doing so much damage the insurance company declared it a total loss and paid the agreed value of the boat—plus an extra $9,000 to un-beach the boat and tow it away for disposal. “That’s what I would have charged to pump the boat out in the first place,” said the salvage captain. “If he’d acted sensibly, he’d still have his boat, and the insurance company wouldn’t be out an extra $135,000 for the loss of the boat.” Your insurance company wants you to call a salvor if you’re in trouble, he added; it’s cheaper than losing the boat.

What Should You Do?

If you find yourself in need of a tow, whether it’s salvage or not, collect evidence; it will come in handy if you go to court. Take pictures and video, make notes of the time, position, weather, sea state, situation, the actions of the salvor, and so forth. Describe how much peril your vessel is in, if any. Is the anchor down and holding to keep the boat off the beach? Is water coming in; are the pumps working? Don’t try to remember how things were at the time when you, or your insurance company, are in court contesting the salvage reward. Rely on facts gathered on the spot.

The salvor will do the same. He will claim everything was much worse, the situation was more perilous, and it took exemplary skill and courage, and all his expensive equipment, to save your boat. Most towboats have cameras to record the salvage, so you need to record it, too. Your insurance company should fight the case for you, since they’re paying the bill, so give them as much ammunition as you can.

Towboat captains I spoke with said the best way to avoid meeting a salvor up close is to keep up with routine maintenance; poor maintenance is the cause of a majority of towboat calls. Have proper equipment onboard—anchors with a decent length of rode, for instance, so you can anchor in deeper water and keep yourself from drifting into peril. Paying attention to what’s happening on board and around the boat can stop small problems from becoming big ones. “Ninety-five percent of the time you’ll have an ‘Oh, crap!’ moment before you have to call for a tow,” said one captain. “Avoid the ‘Oh, crap” moments and chances are you won’t need the towboat.”

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This article originally appeared in the March 2024 issue of Power & Motoryacht magazine.

Source: https://www.powerandmotoryacht.com/maintenance/the-difference-between-towing-and-salvage