Insurer wins coverage dispute with port terminal
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An RLI Corp. unit is not obligated to provide coverage to a port terminal because, as a result of an error, it is not a named insured under its owners’ policy, says a federal appeals court in affirming a lower court ruling.
RLI unit Mt. Hawley Insurance Co., based In Peoria, Illinois, provided commercial general liability coverage to Raul and Lucrecia Gonzalez, who formed Miami-based Miami River Port Terminal L.L.C., according to Wednesday’s ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in Mt. Hawley Insurance Co. v. Miami River Port Terminal L.L.C. et. al.
Because of an error by an insurance agent that was never corrected, Miami River Port Terminal had been added to the Gonzalez policy as an insured location rather than as an additional insured, even before Mt. Hawley had assumed coverage, according to the ruling.
Miami River leased its property to P&L Cargo Services Inc. In September 2013, Wilson Augustave suffered severe bodily injuries at the site while working on the dock helping unload a cargo ship. He filed suit against Miami River Port Terminal and P&L for his injuries.
While Mt. Hawley defended the lawsuit with a reservation of rights, it also sought a declaration it had no duty to defend or indemnify Miami Port Terminal.
The U.S. District Court in Miami ruled in Mt. Hawley’s favor on the basis the injury arose from a joint venture between the company and P&L that was not listed as a named insured on the policy.
On appeal, a unanimous three-judge appeals court panel ruled in Mt. Hawley’s favor, but on a different basis — that Miami Port Terminal was not a named insured on the policy.
“Defendant is not a named Insured and cannot establish entitlement to coverage,” said the ruling, in affirming the lower court’s decision. “Defendant was never covered by the policy.”
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