The language used in insurance policies can hold immense significance when determining the resulting coverage and payouts. In a compelling case involving three tug boats, the M/V Miss Dorothy, the M/V Angela Rae, and the M/V Freedom, an unfortunate collision prompted a dispute over insurance claims. As insurers of the Miss Dorothy sought compensation from the owners of the Angela Rae, the crux of the matter revolved around the interpretation of key terms within the insurance policies. The court’s analysis focused on the definition of “tow” and the parties’ intent, underscoring the critical role that precise language plays in insurance contracts. This case serves as a powerful reminder to both drafters and signers of insurance policies that every word holds weight and can shape the outcome of a claim.
Three tug boats, the M/V Miss Dorothy, the M/V Angela Rae, and the M/V Freedom, plied the Mississippi River with a barge boat in tow. The Angela Rae and the Freedom were positioned behind the barge, and the Miss Dorothy was positioned in front. The Angela Rae was designated as the ‘lead tug’, with the other boats acting as ‘assisting tugs.’
In an unfortunate turn of events, the Miss Dorothy collided with a portion of the Sunshine Bridge’s fender. The Miss Dorothy subsequently sank, resulting in a total loss of the ship and its machinery on board. In the ensuing dispute over insurance claims, the insurers of the Miss Dorothy sued the owners of the Angela Rae in its capacity as the lead tug. The two insurers of the Angela Rae, Atlantic Specialty Insurance Company (“Atlantic Specialty”) and P & I Underwriters (“P & I”), both filed motions averring the insurance responsibility to the other, claiming that the other’s policy should be paid out instead of their own.