Quigg Brothers-Schermer v. Commerical Union Insurance Company

This appeal presents an insurance coverage question. International
Marine Underwriters (IMU), a division of Commercial
Union Insurance Company, appeals the judgment in favor
of Quigg Brothers-Schermer, Inc. (Quigg Brothers). We
reverse and render.

During a storm in November, 1995, two of the Quigg
Brothers' construction barges, the SKOOKUM and the NO. 11
SCOW, broke from their moorings near the mouth of the Quillayute
River and were carried downstream to La Push Harbor.
The barges eventually landed on First Beach within the Quileute
Indian Reservation, adjoining the coastal waters within
the Olympic Coast National Marine Sanctuary. The presence
of the barges on First Beach created several liability risks,
including the possibility that the barges might wash back into
the sanctuary or discharge oil, resulting in fines for nonconforming
use and reimbursement for government removal.
Quigg Brothers acted swiftly to secure, repair and tow the
barges back to the Quigg Brothers' yard, incurring a total cost
of $53,796.81.

Quigg Brothers obtained a marine subscription insurance policy which included both hull insurance clauses and protec-
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tion and indemnity (P & I) insurance clauses. Quigg Brothers
maintained P & I insurance on its entire fleet but maintained
hull coverage on only two vessels, electing to save on premiums
and bear its own hull risks on the remaining vessels,
including the SKOOKUM and the NO . 11 SCOW. IMU was the
underwriter for 75% of the Quigg Brothers' subscription policy.
Quigg Brothers submitted a claim to IMU for the
expenses relating to the barges, seeking coverage under the
P & I clauses for wreck removal and fines and penalties,
which read:

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Click the case caption above for the full text of the
Court's opinion.

Reversed and remanded.

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