Author: Stephen M. Calder, Henry C. Lucas, II
Date: July 1, 2001
MARINE INSURANCE AND GENERAL AVERAGE
STEPHEN M. CALDER
HENRY C. LUCAS, III
LOSS OF LIFE, INJURY AND ILLNESS
(1) Liability for loss of life of, or personal injury to, or
illness of, any person, excluding, however, unless otherwise
agreed by endorsement hereon, liability under any
Compensation Act to any employee of the Assured (other
than a seaman) or in the case of death to his beneficiaries or
Protection hereunder for loss of life or personal injury
arising in connection with the handling of cargo of the vessel
named herein shall commence from the time of receipt by
the Assured of the cargo on dock or wharf or on craft
alongside the said vessel for loading thereon and shall
continue until delivery thereof from dock or wharf of
discharge or until discharge from the said vessel on to
another vessel or craft.
(2) Liability for hospital, medical or other expenses
necessarily and reasonably incurred in respect of loss of life
of, personal injury to, or illness of any member of the crew
of the vessel named herein or any other person. Liability
hereunder shall also include burial expenses not exceeding
Two Hundred ($200) Dollars, when necessarily and
reasonably incurred by the Assured for the burial of any
seaman of said vessel.
(3) Liability for repatriation expenses of any member of
the crew of the vessel named herein, necessarily and
reasonably incurred, under statutory obligation, excepting
such expenses as arise out of or ensue from the termination
of any agreement in accordance with the terms thereof, or
by mutual consent, or by sale of the said vessel, or by other
act of the Assured. Wages shall be included in such
expenses when payable under statutory obligation, during
unemployment due to the wreck or loss of the said vessel.
COVERAGE IN GENERAL
Fleet owner assigned one of its permanent crewmembers to lash together two
Navy barges "borrowed" for the purpose of a fireworks display, and when crewmember was
injured, sought coverage under its fleet P & I policy; held even though crewmember could
still sue owner under the Jones Act, owner was not covered by policy for injury occurring
on non-listed vessel. City and County of San Francisco v. Underwriters at Lloyds, 141 F. 3d
1371, 1998 A.M.C. 1617 (9th Cir. 1998),
Oil platform worker was injured while being lowered in a personnel basket
from the oil platform to the deck of a vessel, and claim was made for coverage under vessel's
P & I policy; held policy providing indemnity "against the liabilities of the assured ... in
respect to the vessel" does not cover accidents in which the vessel had no part, and no
coverage was available sincejury found vessel was not at fault. Smith v. Tenneco OilCo., Inc.,
803 F.2d 1386, 1987 A.M.C. 1681 (5th Cir. 1986).
Oil platform worker filed suit after being struck by an empty personnel basket
being lowered to the deck of a service vessel; platform vessel owner was subsequently
dismissed from the case and then sought to recover defense costs under the vessel charterer's
P & I policy; held, owner was entitled to a defense under the indemnity clause of the vessel
charter and the blanket additional assured provision in the charterer's policy. Clement v.
Marathon Oil Co., 724 F. Supp. 431 (E.D. La. 1989).
After tug charterer's employee was injured during cargo operations on barge,
the employer's general liability insurer settled the employee's claim and then sought
indemnity under separate policy covering employer for charterer's legal liabilities; held,
coverage under Form SP 23, which was incorporated into the charterer's legal liability policy,
extended to cargo handling operations on both the tug and barge. Cigna Ins. Co. v, Anglo
American Ins, Co., Ltd, 1997 WL 729076, 1997 A.M.C. 2913 (D. Alaska 1997).
Tug deck hand was injured by dynamite explosion while working as a pile-driver on attached barge during dredging operation; held, tug owner's P & I policy did not
cover employee's injury because the policy did not insure against liability for injuries to
employees engaged in operations "wholly disassociated" from the operation of the tug.
Employers Mutual Liability Ins. Co. of Wisconsin v. Aetna Ins. Co., 254 F.Supp, 263 (E.D.
Tug owner's P & I policy covered injury to rig employee sustained while
removing cargo from barge, despite clause excluding damages as a result of towing, because
assisting in the unloading of the barge was an integral part of the tug's operation and such
assistance was part of the duties of the crewmembers. Upper Columbia River Towing Co. v.
Glens Falls Ins. Co., 179 F. Supp. 705, 1960 A.M.C. 389 (D. Ore. 1959).
Marine policy provided liability coverage for "damages for all loss of life [and]
bodily injury" in connection with private pleasure use of yacht, but excluded liability
between or among members of the assured's family; held, state statute voiding exclusions of
intra-family claims applies to ocean marine insurance, and claim of assured's father for
personal injuries was within coverage. Acadia Ins, Co. v. McNeil 711 A.2d 873, 1998
A.M..C. 1986 (N.H. 1998), answer to certified question confirmed, 144 F.3d 881 (1st Cir.
Employee on gaming casino boat sued employer for sexual discrimination,
sexual harassment and infliction of emotional distress; on motion for summary judgment by
employer's insurer, held, a P & I policy does not cover non-maritime claims because such
claims are unrelated to the employer's role as vessel owner, but the policy will cover
maritime claims for emotional distress under the Jones Act and claims for unseaworthiness
and maintenance and cure, Plaintiff stated viable claim under the Jones Act and for
maintenance and cure, but failed to allege conduct sufficiently egregious to prove vessel
unseaworthy due to an unfit crew. Williams v. Treasure Chest Casino, L.C.C., 1998 WL
42586, 1998 A.M.C. 1300 (E.D. La, 1998).
Yacht owner sued marine insurer for indemnity and defense of claim by
girlfriend who contracted sexually transmitted disease from owner while on board yacht;
claim did not have sufficient connection with use of yacht to trigger coverage, Peters v.
Fireman's Fund Ins. Co., 67 Cal.App.4th 808, 79 Cal.Rptr.2d 326, 1999 A.M.C. 397 (1998).
P & I insurer disputed coverage for liability to claimant struck by bullet fired
on shore by assured's employee, held, policy only covered liabilities arising from losses
suffered by assured in its capacity as owner, and even if assured was liable under principles
of respondeat superior, there was no causal relation between vessel's operation or ownership
and the employee's negligent act. American Motorists Ins. Co. v. American Employers Ins,
Co., 447 F. Supp. 1314, 1978 A.M.C. 1467, 1474 (W.D. La. 1978), remanded, 600 F.2d 15
(5th Cir, 1979),aff'd by opinion after remand, 608 F.2d 624 (1979).
Crewmembers were injured in a highway accident sixty miles from the vessel
while being transported by van to the vessel; held vessel owner's liability for resulting
personal injury claims was within coverage of P & I policy. St. Paul Ins. Co. v, American
Fidelity Ins. Co., 1996 WL 650128,1996 A.M.C. 2458 (E.D. La. 1996), aff'd, 105 F.3d 654
(5th Cir. 1996).
Employee on assured's seafood processing boat drowned, and P & I coverage
for the wrongful death claim was disputed on the basis decedent was a "processor" rather
than a member of the crew; held claim was outside coverage that was limited to
crewmembers, but insurer owed (and breached) its duty to the assured in the first instance
to defend complaint alleging crewmember status. Underwriters at Lloyds v. Denali Seafoods,
Inc., 729 F. Supp. 721 (W.D. Wash. 1989), aff'd, 927 F.2d 459, 1991 A.M. C. 3000 (9th Cir.
Barge owner's employee was injured during pile loading operation, and excess
marine insurer denied coverage on the basis of an exclusion of the assured's liabilities to
"members of the crews of any vessel owned or operated by the assured;" held, as defined in
McDermott Int'l v. Wilander, 498 U.S. 337 (1991), a crew member is anyone who performs
the work of a vessel and contributes to the vessel's function or the accomplishment of its
mission, and since barge employee met the Supreme Court's definition, his injury was not
covered, Williams v. Fab-Con, Inc., 990 F.2d 228, 1994 A.M.C. 1815 (5th Cir. 1993).
Two Venezuelan trainees died and a third was injured in sinking of jackup
vessel, and insurer denied coverage on the basis of an exclusion of liability for bodily injuries
to "crewmembers;" held, even if insurer had not waived its right to assert exclusion, the term
"crewmember"was not defined in the policy and is ambiguous, and must be construed against
the insurer. In re Cudd Pressure Control, Inc., as owner and operator M/V HOUMAS, 2000
U.S. Dist. LEXIS 4678 (E.D. La. 2000).
Seaman working as divers' tender on service vessel slipped on diesel oil on
dock and was injured, and assured sought liability coverage under policy endorsement for
injury which "occurs while diving;" held, that because exclusions and ambiguities are strictly
construed against the insurer, the endorsement is deemed to include the entire diving
operation in and out of the water. Kelloch v. S&H Subwater Salvage, Inc., 397 F. Supp. 73
8, 1974 A.M.C. 2516 (E.D. La. 1972).
Crew member was injured three days after corporate owner of tug sold all its
stock and replaced its directors and officers, and the new corporate owner settled the claim
and sought reimbursement under P & I policy; held, the assured was barred from recovery
by its violation of the policy provision against "changes of management" without the
insurer's approval, which voided the policy. Parfait v. Central Towing Inc., 660 F.2d 608,
1982 A.M. C. 698 (5th Cir. 1981), petition for rehearing denied, 667 F.2d 118 9, 1982
A.M.C. 1865 (5th Cir. 1982).
After seaman's estate obtained judgment against vessel owner in excess of
primary P & I policy limits, excess insurer sought to prevent primary insurer from applying
against the policy limits the amounts paid for attorney's fees and defense costs; held,
unambiguous wording in primary policy included defense costs within policy limits, and
even if wording were ambiguous, the construction to be adopted must include defense costs
so as to favor the assured rather than the excess insurer, since otherwise the assured would
have to bear those costs. Geehan v. Trawler Arlington Inc., 547 F. 2d 132, 1976 A.M. C. 25
(1st Cir. 1976).
Seaman's suit against vessel owner and P & I insurer was settled for an amount
in excess of the primary P & I policy limits, and because policy included legal fees in the
coverage, primary insurer sought to reduce its share of the settlement by the attorney's fees
and defense costs incurred in defending the claim; held, in the absence of an express defense
agreement among assured, primary insurer and excess insurer, the primary insurer is deemed
to have incurred the expenses for its own defense and could not deduct them from the policy
limits. Verrett v. Ordoyne Towing Co., Inc., 1977 A.M.C. 795 (E.D. La. 1974).
Crew member attached shore-side steam hose to vessel fitting while vessel was
in process of discharging oil cargo, and was injured when hose burst; held, crew member was
not engaged in stevedoring work and therefore stevedoring exception clause in P & I policy
did not apply. Tidewater Oil Co. v. American Steamship Owners Mutual Protection
&1ndemnityAssoc., 1935 A.M. C. 936 (S. Ct. N.Y. 1935).
Shore-based barge cleaner fell into hold of barge, and coverage for
unseaworthiness claim was contested by workmen's compensation insurer; held, exclusion
in employer's liability section of policy as to liability under workmen's compensation laws
was not sufficiently specific to preclude coverage. Harris v. Olympus Terminals & Transport
Co., 516 F.2d 922 (5th Cir. 1975).
Workmen's compensation and employer's liability policy, which covers sums
the assured is obligated to pay because of bodily injury sustained by an employee in the
course of employment, includes the assured's liability for maritime remedies under the Jones
Act and for unseaworthiness and maintenance and cure. Garcia v. Queen, Ltd., 487 F.2d 625,
1973 A.M.C. 2425 (5th Cir. 1973).
Shore-based net mender subject to Longshoremen and Harbor Workers'
Compensation Act fell on board docked fishing vessel, and P & I insurer and workmen's
compensation insurer contested responsibility for the settlement of the resulting claim held,
exclusion in P & I policy as to liability to employees under any compensation act did not
apply, such that both the P & I and the workmen's compensation policies covered the claim.
Voisin v. Ocean Protein, Inc., 321 F. Supp. 173, 1971 A.M.C. 464 (E.D. La. 1970).
Injured barge employee received payments under Longshoremen and Harbor
Workers' Compensation Act, then ' filed suit under Jones Act and for unseaworthiness, and
insurer on workmen's compensation and employer's liability policy contested coverage, held,
exclusion in employer's liability coverage as to workmen's compensation operated only to
distinguish different coverages and did not prohibit claims for damages under applicable
coverage of employer's liability section. Brickley v. Offshore Shipyard, Inc., 270 F. Supp,
985, 1967 A.M.C. 1886 (E.D. La. 1967).
Assured sought coverage under multiple P & I policies for asbestos exposure
claims; held, the "continuous trigger" rule of state law applied because no established
admiralty rule governs asbestos-related injuries, and no compelling need exists for a uniform
federal rule. Skinner Corp. v. Fireman's Fund Ins. Co., 1996 A.M. C. 1517 (W.D. Wash.
Each asbestos claim by a seaman against a vessel owner arises from a separate
"occurrence," such that deductible in P & I policy applies to each claim and assured has the
right to demand full coverage under the policy as to each claim in which the claimant
suffered asbestos exposure, and therefore asbestos injury, during the policy period. Dicola
v. American Steamship Owners Mutual Protection & Indemnity Assoc. (In re Prudential
Lines, Inc.), 158 F.3d 65, 1999 A.M.C. 609 (2d Cir. 1998)(applying New York law).
Sand blaster asserted Jones Act claim for silicosis contracted by exposure to
silica dust over five-year period; held, by the terms of the policies, only the insurer who had
the risk on the last day of exposure to silica dust could be liable. McMillian v. Coating
Specialists, Inc., 427 F. Supp. 54 (E.D. La. 1976).
Seaman employed as sandblaster and spray painter contracted silicosis from
exposure to silicon dioxide over eleven-year period, and coverage was disputed as between
prior policies of employer's liability insurance and P & I insurance; held, employer's liability
coverage was defined to apply only when last day of exposure occurred during policy period,
and since disease manifested during P & I policy period, P & I insurer was solely responsible
for indemnifying employer. Froust v. Coating Specialists, Inc., 364 F. Supp. 1154, 1974
A.M.C. 204 (B.D. La. 1973), aff'd, 494 F.2d 1352 (5th Cir. 1974).
ACCIDENT OR OCCURRENCE/DEDUCTIBLE
Where vessel owner was insured under P & I policies over several years, each
initial exposure of a seaman to asbestos during a policy period is treated as a separate
occurrence, a single deductible is applicable to each claim under a policy, and assured has
the right to demand that one policy pay full coverage for each claim in which a seaman
suffered asbestos exposure, and therefore injury, during the policy period. Dicola v.
American Steamship Owners Mutual Protection & Indemnity Assoc. (In re Prudential Lines,
Inc.), 158 F.3d 65, 1999 A.M.C. 609 (2d Cir. 1998) (applying New York law).
Five employees of assured asserted claims arising from exposure to sludge
being transported from assured's gas treatment facility, and assured sought coverage of policy
limits as to each claim; held, each employee's injury was a separate occurrence because P &
I policy failed to define an cc occurrence," and therefore policy limits applied to each claim.
Exxon Corp. v. St. Paul Fire and Marine Ins. Co., 129 F.3d 791, 1998 A.M.C. 913 (5th Cir.
Claim was made that five deaths resulting from a capsizing should be treated
as separate occurrences under P & I policy that stated "each occurrence shall be treated
separately, for a series of claims hereunder arising from the same occurrence shall be treated
as due to that occurrence;" held, under the "causation theory," all of the deaths resulted from
the single occurrence of the capsizing and one policy Emit would apply, but without
deduction of defense costs. Albany Ins. Co. v, Blain, 1987 A.M.C. 1469 (N.D. Cal. 1987).
Ferry collision resulted in 78 deaths, and claimants asserted each death was
separate occurrence triggering policy limits for each claim; held, one "accident or
occurrence" results when damage to a variety of persons or objects arises immediately from
a single cause, and therefore P & I insurer was obligated to pay only $300, 000 for
aggregated claims; insurer was not, however, entitled to include costs of pursuing declaratory
judgment action within policy limit. McKeithen v. S. S. Frosta 430 F Supp. 899, 1978
A.M.C. 31 (E.D. La. 1977).
Deductibles under P & I policies are intended to free underwriters from small
claims; they are not to assure that payment will be made only to solvent policyholders and
insurer may not defeat obligation to indemnify by showing that assured's portion of payment
was advanced by third party or financed in some other fashion. Liman v. American Steamship
Owners Mutual Protection & Indemnity Assoc., 299F.Supp.106,1969A.M.C. 1669 (S.D.N.Y.
1969), aff'd 417F.2d 627 (2nd Cir.1970), cert. denied, 3 97 U. S. 93 6, 90 S. Ct. 946 (1970).
Platform worker was injured while unloading equipment from a workboat, and
after being held liable, platform owner sought coverage as an additional assured under P &
I policy issued to workboat owner; held policy identified platform owner as additional
assured only in respect of claims "which may be brought by the named Assured's
employees," and therefore platform owner had no coverage as to claims by its own
employees. Ocean Drilling & Exploration Co., Inc, v. Mont Boat Rental Services, Inc., 799
F.2d 213 (5th Cir. 1986).
Crew member brought action against bareboat charterer of crewboat for
injuries arising out of crew change in stormy weather conditions; charterer was named as
additional assured on owner's P & I policies, but insurers contested coverage on grounds that
charterer was not acting as "owner;" held, charterer's orders for crew change were issued in
the capacity of an "owner pro hac vice" and therefore its liability was within coverage.
Offshore Logistics Services v. Mutual Marine Office, 462 F.Supp.485, 1981 A.M. C. 1154
(E.D. La. 1978).
Oil rig worker was injured while attempting to transfer from a crewboat to his
employer's drilling rig; after paying a share of the settlement, employer sought
reimbursement from the crewboat owner's P & I policy;held, employer was deemed to be an
additional assured under provision extending coverage to "anyone for whom the vessel is
working," but employer's liability was not covered since it arose out of negligence as owner
of the rig and as an employer, not as a vessel owner. Gryar v. Odeco, Inc., 719 F.2d 112,
1986 A.M.C. 1359 (5th Cir. 1983).
Vessel owner's P & I policy named the charterer as additional assured, and
charterer sought coverage for claim arising from the charterer's negligent operation of a crane
in removing a welding machine from the deck of the vessel; held, claim was excluded from
coverage because the vessel contributed nothing more than the inert locale for the accident,
and the crane operation was not related to the operation, navigation or management of the
vessel. Lanasse v. Travelers Ins. Co., 450 F.2d 580,1972 A.M.C. 818 (5th Cir. 1971), cert.
denied, 406 U.S. 921(1972).
Barge owner chartered tug and crew to tow its barge; tug employee fell in open
hatch of barge and sued both the barge owner and his employer, and barge owner sought
coverage under tug's P & I policy; held barge owner was named as additional assured in the
tug's policy only with regard to tug as a "named vessel," and therefore was not covered for
its negligence as barge owner in leaving the hatch open. Wedlock v. Gulf Mississippi Marine
Corp., 554F.2d 240,1977A.M.C. 1935 (5th Cir. 1977).
Barge owner sought coverage under tug's P & I policy as to claims arising out
of allision with submerged gas line; held, barge owner was named as an additional assured
only "in respect of the insured tug, and liability was premised on its negligence as "a service
company anxious to perform services for its customers without delay" in directing tug
captain to proceed through a dangerous area without a guide boat or pipeline charts. Dow
Chemical Co. v. Tug Thomas Allen, 349 F.Supp.1354, 1974 A.M. C. 781 (E.D. La. 1972).
The owner, demise charterer and sub-bareboat charterer of a fishing vessel
were named assureds in a layered employer's liability policy, and the demise charterer also
had separate employer's liability and umbrella policies. The vessel broke apart at sea, causing
deaths and injuries to the crew and loss of the vessel, due to the negligence of the sub-bareboat charterer as the employer of the crew. The insurer on the layered liability policy
settled the claim and sought contribution from the demise charterer's insurers; held, no
contribution would be allowed since the negligent employer was a named assured only under
the layered liability policy, and when one of two policies covers a negligent employee, while
the other covers his employer who has a right of indemnity against the employee, the insurer
of the employee must bear the entire loss. Berkeley v. Fireman's Fund Ins. Co., 407 F. Supp.
960, 1976 A.M. C. 856 (W.D. Wash. 1975).
Supply boat owner's P & I policy permitted the boat's charter to oil rig owner,
and named rig operator as an additional assured; boat captain slipped on mud accumulated
on deck of boat due to negligence of the rig operator, who sought coverage under P & I
policy; held coverage denied because rig operator was covered only for conduct "as owner"
of supply boat, neither the supply boat nor her owner was at fault, and liability of rig operator
was premised on its negligence as a rig operator. LaCross v. Craighead, 466 F. Supp. 880,
1982 A.M. C. 2692 (E.D. La. 1979).
Boat captain serviced company yacht and was authorized to use yacht at his
own expense for fishing trips with friends and relatives; held, captain was a permissive user
and omnibus assured under P & I policy, such that coverage extended to captain's negligence
on fishing trip with passengers unknown to yacht owner. Travelers Indemnity Co. v. Gulf
Weighing Corp., 352 F.Supp. 335,1974 A.M.C. 2478 (E.D. La. 1972).
Pilot fell while transferring by ladder from vessel to pilot launch and brought
suit against vessel owner, who in turn sued launch owner for indemnity or contribution; after
contributing to settlement of pilot's claim, launch owner sought coverage from its marine
insurer; held, exclusion in policy as to "any claim for loss of life, illness or injury to pilots
who are members of the Virginia Pilot Association" barred coverage because it extended to
any claim whose basis was injury to a pilot, regardless of the procedural route taken for the
claim to reach the insurer. Virginia Pilot Assoc. v. U S. Fire Ins. Co., 1991 A.M. C. 1915
(E.D. Va. 1991).
Repairman was injured aboard a dredge and settled his claim against the owner,
who then recovered indemnity from the repairman's employer under the Ryan doctrine
governing the warranty of workmanlike service. The employer was assured under a general
liability policy and an employer's liability policy, and both insurers denied coverage; held,
exclusion in general liability policy as to bodily injury to any employee of the assured was
sufficient to exclude liability under the Ryan warranty, while exclusion in employer's liability
policy as to persons subject to the Longshoremen and Harbor Workers' Compensation Act
was sufficient only to exclude direct liability for employees' maritime injuries and did not
exclude coverage for indemnity liability originating from an employee's maritime injury.
Parfait v. Jahncke Service, Inc., 484 F.2d. 296, 1973 A.M.C. 2447 (5th Cir. 1973), cert.
denied, 415 U.S. 957, 94 S. Ct. 1485 (1974).
INSOLVENCY OF ASSURED
Seamen and trustee for bankrupt vessel owner adopted "recycling
arrangement" to settle personal injury claims whereby funds were disbursed to each seaman
but were immediately returned to trustee as non-recourse loans, and trustee then sought
recovery from P & I insurer; held the trustee's payments were sham transactions and were
sham transactions and failed to trigger the indemnity obligation of P & I insurer. Dicola v.
American Steamship Owners Mutual Protection & Indemnity Assoc. (In re Prudential Lines,
Inc.), 15 8 F. 3 d 65, 1999 A.M. C. 609 (2d Cir. 1998) (applying New York law).
Seamen obtained default judgments against insolvent assured, then sued P &
I insurer under New York direct action statute; held insurer's obligation on indemnity policy
does not arise until after assured suffers actual monetary loss and seamen had no right of
action under New York law; however, case was remanded to district court for determination
of whether New York insurance law violated equal protection clause of the United States
Constitution. Ahmed v. American Steamship Owners Mutual Protection &Indemnity Assoc.,
640 F.2d 993, 1981 AM. C. 897 (9th Cir. 1981). On remand, held that statutory exemption
of marine insurance policies from general prohibition against use of assured's bankruptcy as
a defense to third party actions was not unlawfully discriminatory against merchant seamen
and did not violate equal protection clause. Ahmed v. American Steamship Owners Mutual
Protection &Indemnity Assoc., 1982 A.M.C. 1228 (N.D. Cal. 1982), aff'd per curiam, 701
F.2d 824 (9th Cir. 1983).
Seaman brought suit against P & I insurer to recover on default judgment
unpaid because of assured's insolvency; held, New York law permissibly enforces provision
of indemnity policy that insures shipowner against loss, damage and expense which
shipowner "shall become liable to pay and shall pay," and prohibition of direct actions
against marine insurance policies does not deny seamen equal protection under federal or
state constitutions. Miller v. American Steamship Owners MutualProtection &Indemnity
Assoc., 509 F.Supp. 1047,1981 A.M.C. 903 (S.D.N.Y. 1981).
Loading supervisor sued vessel owner and P & I insurer for injuries incurred
when mooring line parted; vessel owner was insolvent and insurer sought retroactive
cancellation of its policy for nonpayment of premiums or "release calls;" held insurer
remained liable under policy, and could not offset unpaid calls against judgment amount,
because nonpayment occurred subsequent to accident and Louisiana law bars insurers from
avoiding coverage due to assured's insolvency. Weiland v. Pyramid Ventures Group, 511
F.Supp. 1034, 1981 A.M.C. 2846 (M.D. La. 1981).
Where P & I underwriters refused to defend personal injury claims against a
bankrupt shipowner, the shipowner's trustee was, under New York law, entitled to indemnity
from the underwriters if trustee paid the full amount of judgments or settlements exceeding
the policy deductible under an agreement where each claimant agreed to refund the
deductible amount to the bankrupt's estate in exchange for recognition of his claim in that
amount as a general creditor of the bankrupt. Liman v. American Steamship Owners Mutual
Protection & Indemnity Assoc., 299 F.Supp. 106,1969 A.M.C. 1669 (S.D.N.Y. 1969), aff'd,
417 F.2d 627 (2d Cir. 1969), cert. denied, 397 U.S. 936 (1970).