ORLANDO, FL – January 7, 2020 – The Eleventh Circuit has ruled that Geico Marine Insurance Company is not responsible for storm damage suffered by a sailboat outside of the permitted navigational area specified in the marine insurance policy in Geico Marine Insurance Company v. James Shackleford.
Shackleford planned to sail around the world in his 65-foot sailboat, "Sea the World." The vessel was struck by lightning in 2011. When Shackleford took the vessel for repairs to a Florida boatyard, he claimed it was improperly hauled from the water which caused structural damage to the ship’s hull and protracted repairs.
In May 2016, Shackleford obtained a liability-only policy from Geico Marine. The policy did not insure the hull of the vessel against damage, but did permit navigation. The day following issuance of the policy, Shackleford asked Geico Marine to change the policy to "port risk ashore." This restriction provided no coverage for navigation; instead, it provided coverage only while the vessel is out of the water. Geico Marine issued an endorsement and updated the policy the same day. Because the coverage now applied only if the vessel was ashore, the updated declarations page removed the original navigation limit that required the vessel to be north of Cape Hatteras after June 1 during hurricane season, if afloat.
Shackleford then asked for the port risk ashore restriction to be removed. One day after Geico Marine removed the port risk ashore restriction and reinstated the navigational limit, Shackleford set sail for another boatyard in Fort Lauderdale for what he described as "extensive repairs." In June 2016, while the vessel was in Fort Lauderdale, a storm caused the vessel to drag anchor and drove her into a sea wall, leading her to take on water and suffer other damage. Shackleford filed a claim under his insurance policy, but Geico Marine denied coverage noting the navigational limits in the policy required the vessel to be north of Cape Hatteras after June 1.
Shackleford countered that missing information in the blank navigation section implied there were no restrictions, arguing that Geico Marine implicitly waived those requirements by removing the port risk ashore restriction so that he could take the vessel to Fort Lauderdale for repairs.
The trial court ruled in Shackleford’s favor that the policy did not contain a navigational limit at the time of the loss and that if it did, Geico Marine implicitly waived the limit when it agreed that Shackleford could sail the vessel for repairs.
The three-judge panel in the Eleventh Circuit reversed, concluding that the policy unambiguously contained a navigation limit when the loss occurred. Because the loss occurred outside of the navigation limit, the policy did not provide coverage. Geico Marine was represented by Ted Shinkle, Jack Reiter, and Lesley-Anne Marks of GrayRobinson.
"We are pleased the Eleventh Circuit reviewed and correctly analyzed the policy language, finding the navigational limits clearly set forth in the policy barred coverage for the loss," explains Reiter, shareholder at GrayRobinson.