Bowhead Operations & Maintenance Solutions LLC v. Endurance American Insurance Co, 2:21-cv-00909

Background

In July 2020 MPC‑4, a 97‑foot Navy vessel operated by Bowhead’s employee under a Navy contract, ran aground; Bowhead alleges about $6.7 million in repair costs.
Bowhead (and related UIC entities) submitted a claim under a primary Ocean Marine Liability policy (1‑year, $1M primary limit) and an excess “bumbershoot” policy; Endurance was the lead underwriter.
Relevant policy terms: a general watercraft‑operation exclusion; an exclusion for "liability assumed under any contract" but a Broad Form Liability Endorsement that greatly expands the definition of "incidental contract"; and a Charterer’s Legal Liability Endorsement indemnifying a named charterer but excluding bareboat/demise charters.
The Navy contract required Bowhead to operate/maintain government‑furnished vessels and incorporated 48 C.F.R. § 252.247‑7007 making contractors liable to the Government for loss/damage to government property.
Parties cross‑moved for partial summary judgment on three core questions (choice of law; whether Bowhead was a "charterer"; whether Bowhead "assumed" liability under the Navy contract). The court applied Alaska law, found triable factual issues as to the charterer endorsement, but held as a matter of law that Bowhead did not "assume" additional liability under the Navy contract.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Choice of law for interpreting the marine insurance policy	Coverage exists under any applicable law; if needed, apply Washington law	Apply federal maritime choice‑of‑law principles, then state law (Alaska) to interpret policy	Apply federal maritime choice‑of‑law rules and Alaska law governs interpretation (contacts point to Alaska)
Whether Bowhead was a “charterer” such that the Charterer’s Legal Liability Endorsement applies	Bowhead was effectively chartering MPC‑4 under the Navy contract; endorsement should cover the loss	Bowhead did not charter the vessel for purposes of the endorsement; if it did, it was a bareboat/demise charter excluded by the endorsement	Genuine issues of material fact exist about parties’ intent and the nature of the arrangement; triable issue precludes summary judgment
Whether the policy’s "liability assumed under any contract" (incidental contract exception) covers the loss	The Navy contract (via §252.247‑7007) made Bowhead liable to the Government, triggering coverage under the incidental‑contract exception	Bowhead did not "assume" new or additional liability; the clause covers only liabilities affirmatively assumed (e.g., indemnities), not ordinary contract liabilities	As a matter of law, Bowhead did not "assume" additional liability; the assumption‑of‑liability language does not cover this loss; related claims dismissed
Disposition of the parties’ partial summary judgment motions	Grant plaintiff’s motion; find coverage	Grant defendants’ motion	Recommend denying Bowhead’s MSJ; grant in part and deny in part defendants’ MSJ (dismiss claims premised on the assumption‑of‑liability theory)

Key Cases Cited

Wilburn Boat Co. v. Fireman’s Fund Ins. Co., 348 U.S. 310 (1955) (state law governs marine insurance contracts absent federal maritime rule)
Certain Underwriters at Lloyds, London v. Inlet Fisheries Inc., 518 F.3d 645 (9th Cir. 2008) (applying Wilburn Boat principles to marine insurance choice of law)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard and drawing inferences for the nonmovant)
West v. Umialik Ins. Co., 8 P.3d 1135 (Alaska 2000) (Alaska’s reasonable‑expectations doctrine and use of extrinsic evidence for insurance contracts)
Olympic, Inc. v. Providence Wash. Ins. Co. of Alaska, 648 P.2d 1008 (Alaska 1982) ("assumption of liability" means an affirmative promise to indemnify, not ordinary contract liability)
Ghotra v. Bandila Shipping, Inc., 113 F.3d 1050 (9th Cir. 1997) (federal maritime choice‑of‑law rules govern admiralty cases)
Ingenco Holdings, LLC v. Ace Am. Ins. Co., 921 F.3d 803 (9th Cir. 2019) (definition of place of contracting and choice‑of‑law contacts analysis)
Travelers Prop. Cas. Co. of Am. v. Peaker Services, Inc., 306 Mich. App. 178 (2014) (following Olympic in distinguishing assumed liability from liability arising from breach)