A federal appellate court on Wednesday upheld a lower court ruling in favor of a Munich Re unit in litigation over its coverage denying a marine vessel’s engine failure.
Coral Gables, Florda-based Wave Cruiser LLC, purchased a marine full-risk insurance from the Munich Re-unit Great Lakes Insurance SE, which provided $ 310,000 in coverage for a marine vessel it purchased, according to the 11th U.S. Circuit Court of Appeals in Atlanta. in Great Lakes Insurance SE v. Wave Cruiser LLC.
According to one exception, the insurance did not cover damage to the ship’s engines unless it was caused by an “unintentional external event”, such as a collision.
A few months after the purchase, the ship̵7;s port engine was hit by a catastrophic engine failure, the verdict said. Its engines had been in operation for 17 hours between an inspector’s pre-purchase inspection and the harbor engine’s fault, and its captain did not report severe weather or anything unusual before the fault, the verdict said.
Great Lakes denied coverage, stating that its policy only covered an unintended external event. It brought an action before the US District Court in Miami, requesting a declaratory judgment. The police did not cover the ship’s damaged engine.
Wave Cruiser filed a counterclaim in which the Great Lakes were prosecuted for failing to fully investigate the claim and for violating their duty of good faith and fair handling.
The district court ruled in favor of the Great Lakes and was confirmed by a unanimous three-judge before the Court of Appeal.
“The Wave Cruiser bore the burden of proving at trial that an external event caused the engine failure, and it failed to arrive at a summary judgment with evidence to meet that burden,” it said in the judgment.
Lawyers in the case did not respond to requests for comment.
In May, a federal appellate court upheld a lower court ruling that the Great Lakes did not need to indemnify a bar and its owners for negligence resulting from a bar employee’s attack on the lounge parking lot because of its policy of exclusion from attack and battery.