Guam Indus. Servs. V. Zurich Am. Ins. Co.

Guam Industrial owned a dry dock that sunk during a typhoon in Guam. Guam Industrial filed a claim under two insurance policies to cover the cost of damage to the dock and the clean up of oil barrels. The district court granted summary judgment in favor of the insurers. Whether derived from federal admiralty law or state law, the court concluded that the law requires strict compliance with marine insurance policy warranties, even when the breach of the warranty did not cause the loss. In this case, the policies required Guam Industrial to obtain and maintain Navy Certification and Guam Industrial breached the warranty because the dry dock was never Navy Certified. The court concluded that the district court correctly ruled that since there was no actual discharge of pollutants, even though the containers of oil were submerged after the sinking, Guam Industrial’s costs of retrieving the containers from the sea were not covered by the policy’s allowance of coverage for cleanup after the “discharge, dispersal, release, or escape” of pollutants. Accordingly, the court affirmed the judgment. View "Guam Indus. Servs. V. Zurich Am. Ins. Co." on Justia Law