A federal court in Texas granted summary judgment on insureds’ claims against their insurer seeking the full limits of a protection and indemnity (“P&I”) coverage, holding that only a smaller crew sublimit was available for the claims of four crewmen. United Specialty Ins. Co. v. Porto Castelo Inc., et al., 2016 WL 2595072 (S.D. Tex. May 5, 2016).
An explosion and fire occurred onboard a covered vessel injuring the four crewmen onboard. The insurer reserved rights, indicating there was coverage under the P&I portion of the policy, but that the crew sublimit for the claims was eroded by defense costs. The insured contended that the crew sublimit should be applied per crew member as there was nothing in the policy explaining how to reconcile the crew sublimit with the total P&I limit. The insureds also argued that the policy did not define the word “crew.” Applying Texas law, the district court held that the clear and unambiguous language of the crew sublimit limited coverage for the claims of the crewmen to the crew sublimit. The court reasoned that the claims by all of the crewmen arose out of a single occurrence, and that the word “crew” referred to the entire crew as a whole, rather than to a single crew member.