Guam Shipyard Sues Insurance Companies for Non-Payment in Big Blue Sinking

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Guam – Guam Shipyard has filed a lawsuit in Guam District Court against 2 insurance companies for non-payment of damages the shipyard suffered in the sinking of its dry dock known as “Big Blue.”

The dry dock was partially submerged after employees left hatches open during a High Surf Advisory on January 2 of this year. The dry dock was finally raised in March.

Read the lawsuit filed in District Court

Guam Shipyard claims damages of $6,881,043.02 and an additional  $394,321.38 that Guam Shipyard spend on environmental mitigation efforts.

The suit alleged “wrongful denial of coverage” and “unlawful conduct” on the part of   Zurich American Insurance Company and Starr Indemnity & Liability Company.

The 2 firms denied Guam Shipyards claim on April 19th in a complaint filed in California’s Northern District Court in San Francisco.

Read the Admiralty and Maritime Complaint for Declaratory Relief filed April 19 in San Francisco District Court

Among the reasons that they denied coverage are:

* Guam Shipyard’s U.S. Navy certification expired on October 31, 2010.

* the dry-dock, “Big Blue” was “un-seaworthy” on October , 2010.

* Guam Shipyard has not established that the sinking of “Big Blue” was the result of any of the named perils insured against under the policy.