Atlantic Marine Florida, LLC v. Evanston Ins. Co. (Eleventh Cir., Dec 24, 2014)
The U.S. Court of Appeals for the Eleventh Circuit reversed a lower court judgment that found a shipbuilder to be a thirdparty beneficiary under an architects and engineers professional liability policy (“A&E policy”) issued to the designer of a passenger vessel. The primary issue was whether the endorsements in the A&E policy obligated the insurer to defend and indemnify the builder in a related wrongful death action based on a negligent design theory. Reversing the lower court’s decision, the Eleventh Circuit held that they did not because it would place the insurer in a conflict of interest situation — i.e., it would force the insurer to separately finance the claims and cross-claims of both parties against each other, which the insurer could not have intended when the policy was issued.