Insurance: Make a List, Check it Twice

The U.S. Court of Appeals for the Eighth Circuit ruled that a marine insurer is liable for losses of unsurveyed cargo where the policy failed to list the cargo as requiring survey prior to shipment. In the instant case, plaintiff purchased electrical generators to be shipped from Japan to the United States and become part of a new power plant. The entire project was insured by a syndicate from Lloyd’s of London. The policy included a provision requiring survey by the London Salvage Association of certain “critical items” and its approval of the ship to be utilized, stowage, and anticipated weather conditions en route. The policy included a section entitled “List of [critical] items”, but no items were ever listed. The electrical generators were damaged during a storm en route. Defendant insurers denied coverage and plaintiffs sued. The court held that the terms of the policy were unambiguous and ruled that the syndicate was liable for the loss, stating: “When the parties establish a clear mechanism for determining rights and obligations, lawyers and judges should not thereafter search through and interpret copious e-mail exchanges and deposition transcripts in an effort to discern whether the parties might really have intended that which they failed to articulate in the written agreement.” Assicurazioni Generali SPA v. Black & Veatch Corp., No. 03-1431 (8th Cir., March 26, 2004). (HK Law)