Lloyd’s underwriters can’t recoup benefits paid to injured seaman

A federal appeals court Friday upheld a lower court and ruled that Lloyd’s underwriters cannot recover benefits paid to an injured seaman under a protection and indemnity policy.

James Michael Jones was captain of a vessel, M/V Select 102, while working for Lafayette, Louisiana-based Select Oilfield Services LLC, when he slipped and fell on a fixed saltwater platform owned by Metairie, Louisiana-based Cox Operating LLC and suffered serious head injuries, according to the ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Certain Underwriters at Lloyds, London v. Cox Operating.

Select, which is not a party to the litigation, had provided Mr. Jones’ services as part of a master services agreement. It agreed to indemnify  Cox for bodily injury under the MSA and to procure insurance policies that included Cox as an additional insured.

Select obtained a general liability policy with Tokio Marine Holdings Inc. unit U.S. Specialty Insurance Co., which was not a party in the appeal, and a maritime P&I policy with Lloyd’s.
Mr. Jones sued Cox and his employer for negligence and unseaworthiness. Lloyd’s paid Mr. Jones an unspecified amount under the P&I policy, then filed a complaint seeking to recoup those costs from Cox as the party at fault for Mr. Jones’ injuries.

The U.S. District Court in New Orleans ruled against Lloyd’s and was affirmed by a three-judge appeals court panel.

The parties dispute whether the amount Lloyd’s paid to Mr. Jones was covered by the P&I policy because Mr. Jones’ injury did not take place on the vessel, the ruling said.

The vessel “was involved in the operations intended by Select and Cox at the time of the incident – even if the vessel wasn’t directly involved in the incident,” it said in affirming the lower court.

Attorneys in the case did not respond to requests for comment.