Engaged by policyholder counsel to analyze Ocean Marine coverage issues under a yacht policy following extensive propeller repair delays. Insurance Bad Faith Claims Handling issues arose based on whether boat remaining outside navigation warranty specified waters was beyond insured’s control and when carrier was informed. Civil Action No. 19-CV-01832-PAB-NRN In The United States District Court For The District of Colorado. Attorneys Scott O’Sullivan and Cara New, The O’Sullivan Law Firm (303) 388-5304.
Commercial Ocean Marine Insurance Expert Witness
Dating to the late 1600s, ocean marine is among the earliest formalized insurance contracts. Sea merchants gathered in groups at Edward Lloyd’s coffeehouse in London to arrange special contracts with each other – contracts that came to serve as the framework for modern ocean marine insurance policies. The merchants agreed that, in the event that one merchant lost a ship, every merchant in the group would assume a percentage of the loss – thus lessening each merchant’s individual risk for potential loss. The merchants formalized these early insurance policies by writing their names under the percentage of loss that each merchant had assumed. Such is the origin of the term underwriter, as well as Certain Underwriters at Lloyds London.
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Commercial Ocean Marine Insurance
While Ocean Marine insurance can be used to cover a wide variety of exposures, coverage is generally divided in to three main areas:
- Hull insurance protects the value of the vessel, its equipment and related machinery. Hull coverage can be used to insure offshore oil rigs and boats operating in inland waters.
- Cargo insurance covers waterborne shipments, and commonly covers shipments continuing onto dry land.
- Liability is known as Protection and Indemnity (P&I). It covers bodily injury and property damage to not only the third-party public, but may include injuries to the master and crew.
Unique Policy Language
The long history of Ocean Marine insurance and the perils faced by ocean going vessels carrying property by sea has resulted in policy language strange to the untrained ear. Wording unique to Ocean Marine has specific meaning in determining coverage, including strange terms such as:
- Barratry - Willful sinking, casting away, or damaging a ship at sea or its cargo.
- F. O. B. (Free on Board) - Term of sale which determines at which destination seller’s responsibility ends and buyer’s responsibility begins.
- General Average - Maritime law principle in which ship and cargo owners share in a loss incurred voluntarily.
- Inchmaree Clause - Covers losses resulting from explosion, negligence of Master or crew; latent defect in the vessel, or equipment breakdown.
- Latent Defect - A defect not readily apparent.
- Sue and Labor Clause - Requires a policyholder, in the event of a loss, to protect property from further loss; insurer pays preservation costs plus attempted salvage costs.
Structuring appropriate coverage require a vast array of Ocean Marine insurance policy and endorsement forms. This includes carrier manuscript forms in addition to forms promulgated by the American Institute of Marine Underwriters (AIMU) and/or London based International Underwriting Association (Institute Clauses).
Our Experience with Ocean Marine Insurance
Mr. Daniel’s Ocean Marine experience includes coverage placement, policy management, and claims experience with:
- Off shore drilling rigs (including Business Income).
- Boat owners (Ocean and Inland waters and Yacht policies, including salvage).
- Importers/Exporters (Open Cargo policies, including Business Income).
- Stock Throughput Policies (seamless property coverage for Ocean Marine, Inland Marine and storage exposures)
- Marinas (Wet and Dry Marine coverages).
- International shipments of oil, machinery, and bulk goods.
Commercial Ocean Marine Insurance Cases
Engaged by policyholder counsel to analyze Property and Business Income/Extra Expense coverage issues under Property, Docks & Piers and Excess Ocean Marine policies for two fire losses originating from a tenant’s dockside storage of wood pellets. Case included review of coinsurance issues, tenant’s status as a Dependent Property for Business Income loss plus carrier subrogation against tenant’s Commercial General Liability policy. Travelers (as subrogee of Port of Port Arthur) v. Texas Pellets, et al, Cause No. B-203,222 In 60th Judicial District Court, Jefferson County, Texas. Attorney Clint Brasher, Brasher Law Firm, PLLC. (409) 832-3737
Engaged by counsel for carrier as plaintiff seeking Declaratory Judgment confirming its coverage denial. Case involved analyzing underwriting data provided by a group of pharmaceutical entities. The application(s) failed to disclose the true nature of the non-pharmaceutical inventories it was seeking to insure. Hurricanes Irma and Maria hit the insured’s locations in Puerto Rico and Florida resulting in losses under the Property and Inland Marine coverage forms. Carrier denied the claims based on policyholder’s misrepresentations. Attorney Rob Reeb, Marwedel, Minichello & Reeb, P.C. (312) 445-5314. U.S. Specialty Insurance Company v. Atlantic Biologicals, Case No. 18-23276-Civ-Cooke/Goodman, United States District Court For The Southern District of Florida.
Engaged by defense counsel to analyze Agent Errors & Omissions issues relative to whether the agent was provided a copy of an oil field services Master Services Agreement. Plaintiff had failed to provide the agent with accurate information to obtain Jones Act / USL&H Maritime Workers Compensation and/or Other States coverage. The dispute resulted from the Commercial General Liability carrier denial of a contractual liability indemnity claim (under the customer’s MSA) for an employee injury which occurred over water. Zadok v. Bell Insurance, Cause No. 2016-44757 In 80th Judicial District Court, Harris County, Texas. Attorneys Ryan Brown and Nathan Shackelford, Hermes Law, PC (214) 749-6800.
Engaged by policyholder counsel to analyze coverage under a Homeowners policy endorsed to insure a float home. Carrier’s claim denial for windstorm damage to the float home subsequently lead to litigation. Case required expertise with Agent Errors & Omissions relative to covered perils under Homeowners and Marine insurance policy forms. Eismann v. Farm Bureau, Case No. CV-2016-478 In First Judicial District Court Of The State of Idaho, County of Kootenai. Attorney April Linscott, Owens, McCrea & Linscott, PLLC (208) 762-0203.
Engaged by policyholder counsel to evaluate claims handling practices of excess layers carrier(s). Case involved Energy Exploration and Development/Operators Extra Expense offshore “removal of wreck and debris” claims resulting from Hurricane Ike. Engagement required analysis of Surplus Lines Umbrella policies coverage trigger(s) relative to exhaustion of underlying insurance limits. W&T Offshore v. National Liability & Fire Insurance Co., et al; C.A. NO. 4:14-CV-02740, United States District Court for the Southern District of Texas Houston Division. Attorney Matthew Parrish, Taunton, Snyder & Slade (713) 993-2342.
Engaged by policyholder counsel to analyze primary and excess carriers’ claims handling practices relative to denial of a multi-million dollar claim for theft of bitumen being stored in China. Both Inland Marine and Ocean Marine coverage was afforded under a single Marine Open Cargo policy form. Engagement required analysis of manuscript Marine Insurance policy forms relative to Bulk Oil Clauses, bills of lading and bailee interests. Great American v. Castleton; Civil Action No. 15-cv-03976-JSR In United States District Court For The Southern District of New York. Attorneys John Shugrue and Caroline Upton, Reed Smith, LLP (312) 207-1000.
Engaged by policyholder counsel as a consulting expert to analyze Agents Errors & Omissions issues. Engagement required knowledge of customary insurance agent compensation relative to Surplus Lines placement of Builders Risk coverage under Ocean Marine policies. Trinity Yachts v. Thomas Rutherfoord and Marsh McLennan; Case 1:11-cv-00507-LG-JMR In The United States District Court for the Southern District of Mississippi, Southern Division. Attorney Joseph Briggett, Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, (504) 568-1990.
Engaged by counsel for third party seeking to compel vicarious liability coverage for a non-owned watercraft accident. Case included issues of Insurance Bad Faith stemming from carrier’s denial of a Commercial Umbrella claim. The Umbrella was placed as Surplus Lines using an ISO-based policy form with a manuscript Marine Liability endorsement. Case required knowledge of the nuances between Commercial General Liability and Excess Marine Liabilities. Antill Pipeline v. Chartis; Civil Action No. 09-3646, c/w 10-2633, and c/w 11-2131 in United States District Court Section C-2 for the Eastern District of Louisiana. Attorneys Bob Reich and Larry Plunkett – Reich, Album & Plunkett, LLC (504) 830-3999.
Engaged by tug boat owner listed as third party Additional Assured under an Ocean Marine policy. Case involved Agents Errors & Omissions and Insurance Bad Faith requiring analysis of Hull damage late notice of claim and carrier claims handling practices. Marc Oliver v. Atchafalaya Marine, LLC, et al; Civil Action No. CV: 11-223-KD-C, United States District Court for the Southern District of Alabama, Southern Division. Attorney Margaret Miller, Margaret McDowell Miller, LLC (251) 635-6660.
Engaged by agent’s defense counsel as an Ocean Marine Insurance and Agent Errors and Omissions Expert. Case required review of Ocean Marine placement procedures, assignment of loss payee/mortgagee interests and coverage territory issues. Dispute resulted from a hull damage claim denial for a dredge barge which ran aground near Cancun, Mexico. Deep Sea Financing, LLC v. Brennan & Co., Civil Action No. STCV1100702 In The State Court of Chatham County, State of Georgia. Attorney Pat O’Connor, Oliver Maner LLP, (912) 236-3311
Designated as an Ocean Marine Insurance Expert by counsel for policyholder. Engagement required analysis of seaworthiness and carrier Bad Faith claims handling after a lightning strike damaged a yacht. Attorney Chris Garcia, Mills Shirley, L.L.P. (409) 763-2341; Adams v. One Beacon Insurance, et al; Cause No. 09CV2262 in the 10th Judicial District Court, Galveston County, Texas.
Designated by policyholder counsel as their Agents Errors & Omissions, Insurance Bad Faith and Property Insurance Expert. Engagement required expertise with blanket insurance, coinsurance vs. Agreed Value, Business Income, Wet Marine Insurance, and Surplus Lines custom & practice. Claim dispute followed after multi-million dollar flood damage to the largest marina on Lake Texoma. Lake Texoma Highport, LLC v. Lloyd’s of London, et al; Civil Action No. 4:08cv285; In The United States District Court For The Eastern District Of Texas, Sherman Division. Attorney Bart Higgins – Shields, Britton, Frazier (972) 788-2040.
Engaged by policyholder’s counsel to analyze claim issues following a cruise boat sinking. Case included issues of seaworthiness and Insurance Bad Faith claims handling in regards to settlement of a Commercial Ocean Marine loss. Attorney Jim Ross, Jim Ross & Associates, P.C. (817) 275-4100; Admiralty Inland Cruises v. Indemnity Insurance / ACE USA, et al; No.4-08CV-746-A United States District Court for the Northern District of Texas, Fort Worth Division.
Engaged by defense counsel as their Agent Errors and Omissions, Property Insurance and Insurance Bad Faith Expert. Case required expertise with Business Income, Flood Insurance, Surplus Lines & Ocean Marine Insurance. Litigation resulted from partial claim denials for losses during Hurricanes Jeanne and Francis. Attorneys Larry Montgomery & Lee Chase, Glankler Brown, PLLC ( 901) 525-1322 . Dyer Investment Company, LLC, et al v. Marsh & McLennan and Certain Underwriters at Lloyd’s; Case No. 05CV2812-D/P in the United States District Court for the Western District of Tennessee Western Division.
Engaged by defense counsel to analyze claims issues relative to coverage for Boiler & Machinery losses under a Lloyds Ocean Marine Builders Risk policy. Attorney Clif Hall – Westmoreland Hall, PC (713) 871-9000. Smith-Enron et al v. Underwriters at Lloyds, et al; Cause No. A-175389, Jefferson County Texas 58th Judicial District.
Retained by defense counsel to render opinions in answer to allegations of Insurance Agent Errors & Omissions and Insurance Bad Faith claims misconduct by wholesale broker at Lloyds London. Case issues involved coverage under Lloyds Ocean Marine Insurance Builders Risk coverage form. Attorney Ashley Parrish – Cantey & Hanger, LLP, (214) 978-4145, The Houston Exploration Company v. Tysers International Insurance & Reinsurance Brokers & At Lloyds, et al, Cause No. 2004-61582 in the 234th District Court, Harris County, Texas.
Engaged by plaintiff counsel to research coverage availability regarding both Inland Marine Insurance and Ocean Marine Insurance after extensive damage to machinery in transit. Parties included the machinery manufacturer as well as multiple cargo transfer agents and common carriers. Attorney Hugh Connor – Kelly Hart & Hallman, LLP, (817) 332-2500. Anchor Fabrication L.L.P. vs. Southwest Freight, Inc., et al; Cause No. 236-204366-04; 236th Judicial District, Tarrant County, Texas.