The Court of Appeals for the Fifth Circuit just issued a decision relating to longshoreman negligence claims made against third parties and the insurance coverage of those claims. The decision is unpublished but is available for download here.
In Bayou Steel Corp. v. Evanston Insurance Co., a stevedore was injured while unloading a barge in Illinois. He brought suit against the facility owner. The facility owner was denied coverage by some of its insurers and brought suit against them to compel coverage for the settlement of the underlying case.
The insurance policy at issue had an exclusion which stated:
This insurance does not apply to “Bodily Injury”, “Property Damage”, “Personal Injury”, or “Advertising Injury”, imposed upon you or assumed by you under contract with respect to claims made or suits brought against you or any indemnitee pursuant to the “United States Longshoremen & Harbor Workers Compensation Act” (Title 33 USCA, Sections 901 - 950) including any amendments or revisions thereto.
The issue on appeal was whether a stevedore's claim, which admittedly was a claim recognized by the Longshoreman' and Harbor Workers Compensation Act (LHWCA) was "pursuant to" the LHWCA and thus fell under this exclusion. The court found that it was not because the statute explicitly did not extinguish a longshoreman's negligence claims against third parties as it did for claims against employers.
The court noted that primary purpose behind the LHCWA was to create a compensation scheme for longshore and harbor workers who would not be covered under their state's worker's compensation statutes. The statute did not remove a plaintiff's rights against third parties and while his injuries may be covered by the LHWCA, his claims against the third party were not "pursuant to" the LWHCA.
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