Mariners sometimes debate about whether a vessel is safer in port or at sea during a storm. Many readers have probably heard the quote, “A ship in harbor is safe, but that is not what ships are built for.” It is attributed to John A Shedd in his 1928 collection of sayings, Salt From My Attic. While those words are etched in nautical lore, large modern-day vessels do not always subscribe to the notion that a harbor is the best place to be in a hurricane. In fact, we see naval vessels head out to sea when severe weather looms. This decision subjects them to the full force of storms on the open ocean with nowhere to hide, but it offers the benefit of deep water under the keel and wide-open expanses that might buy time if problems arise. This strategy could prevent being battered against the steel bulkhead of a wharf. Or it could avoid destruction after bucking like a wild bronco in shallow waters… like the supertanker Amoco Cadiz when caught in the teeth of a nasty March gale after her steering gear failed off the coast of France in 1978.
Although the practice of putting to sea in the interest of safety and self-preservation can make sense for 9,000-ton Arleigh Burke-class destroyers, it may not necessarily hold true for smaller vessels. As far as the insurance industry is concerned, smaller vessels are safer in port… end of story. What’s more, they’re safer still if hauled out of the water and sitting high and dry. The insurance industry even has haul-out provisions in marine policies. This very issue was at the core of a lawsuit involving damage from Hurricane Ian to a 57-foot Carver Voyager motoryacht in Florida.
The owner of the motoryacht obtained an insurance policy sometime around March 2022. He then filed a claim for damages after the yacht was totaled when Hurricane Ian hit Florida in September 2022. The insurance carrier denied the claim. At the heart of the denial was a haul-out provision in the insurance policy. Under this provision, the vessel had to be hauled out and placed on dry land if there were any windstorm warnings. On September 26, 2022, a windstorm warning was issued. The vessel was not hauled out and it sank on September 28, 2022 when the hurricane hit the area.
The vessel owner presented an affidavit which detailed efforts to comply with the policy. He had attempted to find a marina that would haul the motoryacht. This involved contacting every location found within a large radius of the yacht’s location. The facilities that had been contacted told the vessel owner they would haul the vessel only if the owner joined their facility’s “storm haul out list.” The yacht owner tried to get on every list, but the lists were full and no facilities were accepting new vessels onto their lists. Some facilities had waitlists hundreds of vessels long.
The vessel owner originally filed the lawsuit in state court, but the insurance carrier had it removed to federal court. The vessel owner argued two points, that the provision could not be reasonably complied with by owner. The second argument was that the provision violated Florida public policy, which prohibits requiring vessel owners to be obligated to remove their vessels from their marina slips upon the issuance of a windstorm warning.
The insurance carrier moved for summary judgment, a legal maneuver that basically asks the court to rule that there is no genuine dispute as to any material fact here. In other words, “It’s clear on its face – please decide things in our favor here.” But the court felt a closer look was needed. The court granted that request in part and denied it in part. The court felt that plaintiff’s failure to haul the vessel out of the water and onto land did increase the hazard. But it felt that whether this failure was within the control of the vessel owner was something for a jury to decide.
The decision shows us that insurance policies can contain detailed provisions that many might not give too much thought to, until something happens that focuses attention on the fine print.
Ref: Knight, as Trustee, v. Markel American Insurance Company, Case No: 2:24-cv-592-JES-NPM, United States District Court, Middle District of Florida, Ft. Myers Division