If you are going to skipper a boat on your own, you will take responsibility, your competence and sense of responsibility are preconditions for your task.
The extended third-party liability insurance covers claims made against you as well as defence unjustified arrears. Boats and yachts are usually covered by liability insurance. Nevertheless, it frequently happens that a yacht liability or fully comprehensive insurer does not pay out in some instances, or the cover sum or the scope of the contract is insufficient. The cover takes effect when the yacht's own liability insurance cannot be applied. The extended third-party insurance does not cover e.g. the deposit (see deposit insurance); damages which were deliberately induced; penalties and fines.
It is highly recommended to apply for this insurance if you will be the skipper.