We often times represent clients whose marine insurance companies wrongfully deny claims based upon exclusions even though the loss was really caused by a covered risk. This is a common tactic of marine insurance companies as they often play the odds that you will simply go away and not fight. Fortunately, maritime law is on your side should you decide to fight.
To illustrate this point, we recently represented a yacht owner whose engine sustained serious damage as a result of an improperly installed coolant plug which fell out while cruising. Boat/U.S. (Continental Insurance Company) denied the claim because the policy excluded damage resulting from overheating engines. It is true the engine overheated; and, at first blush, an owner may think he has no insurance. However, under maritime law, insurance companies are to look at the cause which is most essentially connected with the loss and not merely an incidental cause which may be nearer in time to the loss.
Brais & Brais filed suit for breach of contract alleging the policy covered damages resulting from the improper plug installation, and such improper installation was the cause essentially connected with the engine damage. We argued if the plug was properly installed, the engine would not have overheated and the loss would not have occurred. We also filed a claim for punitive damages and the assessment of attorney fees under the Rhode Island Bad Faith Insurance Statute for the claim’s wrongful denial. Shortly thereafter, Boat/U.S., instead of defending the case, changed course from denying coverage to paying the claim.
If you think your marine insurance company wrongly denied your claim and wish to speak to a board certified maritime attorney, do not hesitate to contact us.