Marine company sues insurance broker after bearing $650K settlement costs over accident

By Louisiana Record reports | Aug 7, 2015

GRETNA – A marine company is suing an insurance broker and his company for allegedly not selecting the proper insurance policy, leaving it open to a $650,000 liability payment to an injured employee. 

Coastal Towing filed suit against North Gulf Marine Inc., Eric M. Schade and Westport Insurance Corporation in the 24th Judicial District Court on June 12.

Coastal Towing contends that in 2002 it purchased an insurance policy from North Gulf Marine Inc. and Schade for several towing vessels for operation in the Gulf of Mexico, but were never provided with the paperwork for the insurance policies.

The plaintiff alleges the defendants ensured the business that it was covered by the insurance policy at all times. However, Coastal Towing claims shortly after its property insurance premium was lowered due to a lack of claims an incident occurred aboard one of its vessels in which an employee of a related business was injured. 

The plaintiff asserts that although the injury was considered to be minor, its related insurance claim was denied by the insurer selected by North Gulf Marine Inc. and Schade based on allegations that Coastal Towing did not report the incident in time.

The ultimate settlement of the lawsuit by the injured employee cost Coastal Towing $650,000 of which  it claims none of that amount has been paid for by the insurer due to faults in its insurance policy that was selected by North Gulf Marine Inc. and Schade.

The defendant is accused of breach of contract, failing to explain insurance policy provisions, failing to perform needs analysis and failing to timely report incidents.

Damages in the amount of $800,000 are sought by the plaintiff.

Coastal Towing is represented by attorney Alan R. Sacks of New York, N.Y.

The case has been assigned to Division F Judge Michael P. Mentz.

Case no. 750-599.

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