Fisker sues insurance company over 338 cars, $33M, lost in Sandy Cleantech News and Analysis
The policy reads as follows:
Damage to personal property included within Insured Property, while in
transit within the Territory [including the United States] …from the time
the property is moved for the purpose of loading and continuously
thereafter while awaiting and during loading and unloading and in
temporary storage … including during deviation and delay, until safely
delivered and accepted at place of final destination.
It seems clear that the cars had not yet reached their final destination (the dealers) as they were awaiting the fan recall service, as well as battery and software updates.
They also did not start being covered until they were on US soil, per the policy's paragraph II.T, which excludes an import shipment from coverage until the later of two events occurs:
(a)
The shipment is unloaded from the importing vessel or conveyance;
or
(b)
Coverage under an ocean marine or other insurance policy covering
the shipment ends.
Both of those conditions seem to have occurred.
That said, while the policy has a total limit per occurrence of $100,000,000, there is an "in transit" sublimit of $5,000,000, per paragraph G, section (c) of the Declarations:
"'Transit' is subject to a distinct sublimit of $5,000,000."
But Fisker has arguments about why that sublimit may not apply. See Complaint, p. 8.
as has been discussed, the tough challenge Fisker faces is the fact that they were at least somewhat in control of the cars at the FAPS facility. Fisker tries to characterize this as being "movement for the purpose of loading" at FAPS, but the recall service and updates on software and battery are hard to argue in that way.
FAPS is a transshipment facility, and delivery of the vehicles into the FAPS
facility constituted “movement for the purpose of loading” onto conveyances for further
transport to final dealer destinations in the United States, within the meaning of the Policy.
Accordingly, the Transit coverage of the Policy extended to the vehicles at the time of the loss.
See Ex. A at 11 of 50.
Fisker's argument is:
Because of the recall which required replacement of cooling fans before the
vehicles could legally be delivered to dealers, as well as other service requirements, the vehicles
were subject to “deviation and delay” within the meaning of the Policy before final shipment
from the transshipment facility to the dealerships could be effected.
All that said, I believe this will all turn on the interpretation of the contract language and these issues by the court and the jury, if they get that far. I strongly suspect that after summary judgment it will settle, assuming that Fisker makes it through summary judgment. The carrier (XL America) will not want to be seen by Fisker and the whole industry as being unwilling to pay on claims. It has too much negative baggage for their future business.
My $0.02 (as someone who calculates damages in litigation and testifies to such, including in insurance disputes)...