Insurer Disputes Coverage in $20M Marine Cable Damage Lawsuit

February 23, 2026 | JacobiJournal.com — A high-stakes insurance dispute is unfolding in federal court after Great American Insurance Company asked a Washington judge to declare that it has no duty to defend or indemnify a marine services contractor accused of damaging a submerged electrical cable with an estimated replacement cost exceeding $20 million.

The insurer’s position places renewed attention on how commercial marine policies respond to underwater infrastructure losses and whether such claims fall within standard coverage grants or exclusions.

What the Insurer Is Asking the Court to Decide

In filings submitted to a United States District Court for the Western District of Washington, Great American argues that the allegations in the underlying lawsuit do not trigger coverage under the relevant policy. According to the insurer, the damage alleged arose from operations that fall outside the scope of insured risks or are expressly excluded under policy terms governing marine construction and installation work.

The insurer is seeking declaratory relief, asking the court to rule that it has no obligation to provide a legal defense or pay any potential judgment tied to the cable damage claim.

How the Alleged Marine Cable Damage Occurred

The underlying lawsuit centers on a buoy installation project performed in navigable waters. The plaintiff alleges that installation activities interfered with and damaged an underwater electric transmission cable, disrupting service and creating a costly repair scenario. Industry estimates cited in court filings place the replacement cost at more than $20 million, reflecting the complexity of locating, accessing, and repairing subsea infrastructure.

Such losses often involve overlapping liability theories, including negligence, maritime law principles, and contractual risk allocation.

Why Coverage Is Being Contested

Great American contends that the policy issued to the buoy installation company was never intended to cover damage to third-party subsea power cables. Insurers frequently rely on exclusions related to “your work,” property damage to infrastructure being operated near, or specialized endorsements required for cable and pipeline exposure.

Coverage disputes of this nature often turn on narrow policy language and the precise factual allegations pleaded in the underlying complaint, rather than the ultimate merits of the damage claim itself.

What This Case Signals for Marine Contractors and Insurers

The dispute highlights the growing financial exposure associated with underwater energy and communications infrastructure. As offshore wind, subsea power transmission, and coastal resilience projects expand, insurers are scrutinizing marine risks more closely.

For contractors, the case underscores the importance of verifying whether their insurance programs specifically address cable and pipeline risks. For insurers, it reflects an ongoing effort to limit unintended exposure arising from high-cost marine losses that can resemble infrastructure or utility claims.

Readers seeking additional context on federal court filings and insurance coverage disputes involving marine infrastructure can review public court records through CourtListener.

FAQs: About Marine Cable Damage Insurance

What is marine cable damage insurance?

It refers to insurance coverage addressing liability for damage to underwater power or communication cables, often requiring specialized endorsements beyond standard marine policies.

Why would an insurer deny coverage for cable damage?

Insurers may deny coverage if policy exclusions apply, if the work performed falls outside insured operations, or if the damaged property is excluded under the policy.

How expensive is underwater cable repair?

Repair and replacement costs can reach tens of millions of dollars due to specialized vessels, environmental permitting, and technical complexity.

Who is responsible when marine construction damages infrastructure?

Responsibility typically depends on negligence findings, contractual risk allocation, and applicable maritime or state law.

Insurance coverage disputes involving large-scale infrastructure losses can shape future underwriting and litigation trends. Subscribe to JacobiJournal.com for ongoing coverage of complex insurance litigation, fraud-related disputes, and high-value commercial claims.