As predicted by our Florida Board Certified Maritime Attorneys, TOTE Maritime and Sea Star Lines have filed a Petition for Exoneration from or Limitation of Liability for any damages associated with the death of the 33 sailors aboard the El Faro. The lawsuit is pending in the Federal District Court for the Middle District of Florida. The aim of the offensive suit is to exonerate, or if that fails, cap the amount payable to the families of the merchant mariners who lost their lives in the service of the ill-fated cargo ship. The question for those following this catastrophe is why TOTE who publicly stated “Our focus has been on supporting and caring for the family members, loved ones, and friends of those aboard the El Faro“ is now seeking a Federal Court to exonerate it from any responsibility or limit the amount it must pay the families? The answer is simple. TOTE and Sea Star Lines’ marine insurer has taken control of the defense of the case and the shipping companies are required under contract to cooperate in this legal maneuver so that the insurance company could lessen the amount of money it has to pay the victims’ families.
Typically, a shipping company obtains liability insurance in the case of an injury or death occurring aboard its ship. The shipping company self-retains a portion of the exposure. This self-retention amount could range between one thousand to one million dollars. After that money is exhausted (either by paying defense attorneys or paying claims), the insurance company is responsible to pay the balance of the damage up to the policy limits (if there is a policy limit). As such, TOTE and Sea Star Lines’ exposure is already capped at their self-retention. Consequently, the Limitation of Liability lawsuit filed on their behalf really only benefits the insurance company.