Ask a Maritime Attorney: Should I tender a claim to my insurance?

Question:

During their regular monthly service on my boat, my dive service broke the threaded studs that are used to secure one of the zincs to the hull. This would normally be a minor fix, but the studs are molded into the foam core in the bottom of the swim step and the repair will apparently require the boat to be hauled from the water at a shipyard. I am suddenly facing a significant repair bill. Can I go after the dive service for this? If not, should I submit a claim to my insurance company?

Answer

Boat owners should keep their insurance company in mind whenever something bad happens to their boat. There is very little “downside” to tendering a claim for damage, even if you are concerned that the claim may be denied. In fact, the chance that the claim may be denied is usually the only downside. So, to our reader, yes – tender the claim to your insurance company.

Digging deeper into this incident, the dive service may in fact be responsible for the damage. But chasing after the dive service will probably lead to litigation, which as discussed below will involve a very long road to recovery. And, even if the dive service is eventually found to be liable, and even if our reader can successfully enforce a judgment against the dive service, he will still be responsible for the initial repair costs at the boatyard.

Boat owners may be reluctant to tender a claim like this to their insurance company because it may let the responsible party – in this case the dive service – escape liability for the damage. However, if this is a significant and straight-forward claim, the insurance company will probably initiate their own “subrogation” claim against the dive service. Subrogation is a process spelled out in a provision that is found in most property damage insurance policies. Under that provision, the policy holder (the boat owner in this case) assigns his or her claim for damage to the insurance company, which allows the insurance company to pursue the responsible party after they pay the claim to the boat owner.

The question of whether a claim like this will be paid depends on a long list of criteria specific to our reader’s claim. We can’t really address those specifics here, but we can look at this in general terms. I will go out on a limb and say that a claim like this will in many cases be covered. Marine insurance is designed to cover damage caused by negligence. That negligence is not limited to you falling asleep at the helm and running your boat aground. It covers all kinds of negligence, including the negligence of the people you hire to work on the boat.

Recreational marine insurance policies are generally “all-risk” policies, which means they cover everything unless the policy expressly excludes a particular peril. Boat owners should familiarize themselves with the itemized “exclusions” listed in their policy, but negligence of a hired repair or maintenance worker will usually not be excluded. The bigger risk of denial will come from the physical condition of the threaded studs. Damage caused by corrosion is excluded from coverage in every marine insurance policy, and our reader’s claim will probably be denied if the studs were significantly corroded.

Our reader will face other roadblocks if the threaded studs were corroded. If the insurance claim is denied, the next logical step would probably be to pursue a litigation option.  A litigation claim against the dive service would seek to establish that the diver was negligent when he broke the threaded studs.

A claim of negligence will compare the actions of this diver to a hypothetical standard of care for all divers, and if this diver failed to meet that standard, he will be found to be at least partially negligent. This type of evaluation usually requires expert witness testimony to establish the standard of care, and the expert would look at all of the circumstances surrounding the incident. Here, those circumstances may include the corrosion of the threaded studs.

The corrosion may let the diver off the hook if it is established that any diver working on the boat would have broken the threaded studs. Or his liability may be reduced to a percentage of fault if the evidence is not entirely clear. In any case, the claim against the diver may be complicated by the same issues that may complicate the insurance claim. As noted earlier in this article, litigation will involve a very long road to recovery, and as such most claims should be tendered to the insurance company before considering litigation.

David Weil is licensed to practice law in the state of California and as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.

David Weil is the managing attorney at Weil & Associates (www.weilmaritime.com) in Seal Beach. He is certified as a Specialist in Admiralty and Maritime Law by the State Bar of California Board of Legal Specialization and a “Proctor in Admiralty” Member of the Maritime Law Association of the United States, an adjunct professor of Admiralty Law, and former legal counsel to the California Yacht Brokers Association. If you have a maritime law question for Weil, he can be contacted at 562-799-5508, through his website at www.weilmaritime.com,  or via email at dweil@weilmaritime.com.

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