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Yacht owner allowed to pursue Hurricane Dorian insurance claim despite breach of warranty in policy

A 61-foot Viking Princess named the SERENDIPITY was destroyed during Hurricane Dorian in the Bahamas. SERENDIPITY’s owner filed an insurance claim for the damage. Its claim was denied because the insurer said the vessel owner moved the vessel to the Bahamas without a licensed captain in violation of a warranty in the applicable insurance policy. SERENDIPITY’s owner filed a lawsuit suit against the insurer for breach of contract and bad faith. Litigation ensued.

The insurer filed a motion for summary judgment asking the court to dismiss the lawsuit based on the vessel owner’s failure to comply with the policy's Captain Warranty. The court initially denied the motion but directed SERENDIPITY's owner to file a brief addressing whether the breach of the Captain Warranty increased the hazard for the vessel. Under Florida Law, a breach of warranty in a marine policy must increase hazard before coverage can be voided. See Fla. Stat. § 627.409(2).

In response, the yacht owner submitted a brief arguing that running the vessel to the Bahamas without a licensed captain did not increase hazard because (1) the policy authorized the owner to operate the vessel without a captain; and (2) the vessel was not in jeopardy with the owner as captain because he was highly experienced operating his vessel and similar vessels and had extensive experience navigating to and from the Bahamas.

The insurer countered by offering an expert's opinion that not having a licensed captain did increase hazard because the expert opined that a licensed captain would have moved the vessel back to Cape Canaveral before Hurricane Dorian made landfall.

The district court adopted the insurer’s expert testimony and granted summary judgment in favor of the insurer. The court found the yacht owner failed to produce any evidence to rebut the insurer’s expert’s testimony regarding increased hazard.

SERENDIPITY’s owner timely appealed the dismissal. On appeal, the vessel owner argued:

  1. The Captain Warranty is ambiguous and vague, and that under the reading of the warranty most favorable to the vessel owner (as required by the applicable state statute) there was no breach of warranty.

  2. Even if there was a breach, the breach did not justify denial of coverage under the policy because it did not increase the hazard posed to the SERENDIPITY by Hurricane Dorian. If the breach did not increase the hazard, the policy remained enforceable and the insurer was required to pay under Florida Law.

Argument one was rejected. While the Eleventh Circuit acknowledged the Captain Warranty was ambiguous and subject to different reasonable interpretations, it determined the yacht owner failed to fulfill its obligations under either reasonable interpretation:

In the end, though, the fact that the warranty may have been ambiguous does not save Serendipity, LLC because under any reasonable interpretation of its text, Serendipity, LLC failed to fulfill its obligations. Under any reasonable interpretation of the Policy, Serendipity, LLC was required to hire a licensed captain either to care for the Serendipity full time, or whose full-time job was as a licensed captain. Plainly, Serendipity, LLC did neither.

Argument two worked. The Eleventh Circuit disagreed with the lower court’s finding that the yacht owner failed to produce any evidence to rebut the testimony of the insurer’s expert witness who opined that any licensed captain would have driven the SERENDIPITY back to Cape Canaveral before Hurricane Dorian struck the Bahamas. The Eleventh Circuit pointed to the yacht owner’s own motion for summary judgment stating that Hurricane Dorian at the time of departure was actually predicted to hit Cape Canaveral and was not predicted to hit the Bahamas until hours before the yacht was destroyed.

Based on the above, the appellate court reversed the lower court’s dismissal of the lawsuit. It determined a material dispute of fact remained about whether the vessel owner’s failure to hire a full-time licensed captain increased the risk to the SERENDIPITY posed by Hurricane Dorian.

So the vessel owner won its appeal and is allowed to try the issue before a jury at trial.

The case citation for this decision is Serendipity At Sea, LLC v. Underwriters at LLoyd’s of London Subscribing to Policy Number 187581, Case No. 21-11733 (11th Circuit January 4, 2023). Here is a link to the decision:

Please feel free to reach out at or (504) 553-1439 if you have any questions or would like to discuss.


Adam Davis


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