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Starr loses cover suit with marine pollution insures



A federal appeals court on Wednesday upheld at lower court decision and ruled against Starr Indemnity & Liability Co. in coverage litigation with a marine pollution insurer in a case involving two grounded oil barges

court papers in Starr Indemnity & Liability Co., as subrogor of all rights of Genesis Marine LLC at Water Quality Insurance Syndicate. One barge contained 16,702 barrels of oil while the second carried 13,813, according to the court papers.

Genesis was insured under several insurance policies, including New York-based Starr's "hole and machinery" and "protection and indemnity" policies and a Pollution liability policy provided by New York-based Water Quality, a marine pollution insurer, according to court papers.

Both for the grounded barges

Starr, which reimbursed or paid more than $ 3.4 million in pollution control cost and expenses related to the incident, according to the complaint filed suit in US New York District Court in a subrogation action against Water Quality.

The district court ruled in Water Quality's favor, which was upheld by a unanimous three-judge panel of the 2nd U.S. Circuit Court of Appeals in New York

The district court ruled that "two necessary conditions" for coverage under water quality pollution liability policy had not been satisfied,

First the barges' grounding never posed a "substantial threat of discharge" under the Oil Pollution Act of 1

990, said the ruling. Secondly, the oil removal and salvage costs "were not incurred to mitigate a perceived threat of discharge," the ruling said.

"Starr maintains that the United States Coast Guard believed the bargain posed a substantial threat of discharge, and that any finding to the contrary is thereby erroneous, ”said the ruling.

The ruling said, however,“ We ​​identify no error – much less clear error and that the grounded barges never presented a substantial threat of oil discharge. ”

It said Starr" relies almost exclusively "on the testimony of a chief petty officer who testified" the bargain presented at a substantial threat of oil discharge. " ] The ruling said among the reasons the district court discredited her testimony was "largely contradicted by the trial record and by other credible witness testimony," said the appeals.

In the case of a federal appeals court overturned in a lower court ruling in a favor of a OneBeacon Insurance Group unit in court. with a protection and indemnity insurer over insurance coverage for a sunken tugboat.


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