Foss Maritime is taking three insurers to federal court over multimillion‑dollar tug damage claims it says remain unresolved after several years.
On December 11, 2025, Foss Maritime Company, LLC and Northwest Tug Leasing, LLC filed suit in the US District Court for the Western District of Washington at Seattle against Navigators Insurance Company, Zurich American Insurance Company, and Ascot Insurance Company.
The filing focuses on hull and machinery coverage for four tugs and alleges that the insurers have failed, over several years, to take a clear position or pay for substantial repair costs.
According to the court papers, Foss and its affiliates have bought a series of one‑year “Marine Hull / Liability Package” policies from at least 2018 through 2024, with Navigators Insurance Company acting as lead underwriter. Four annual policies in effect from March 1, 2020 to March 1, 2024 are identified as pertinent. The plaintiffs say they paid the premiums and are each a “named Assured” under these policies.
The complaint describes two clauses in the hull and machinery coverage. One, labeled “Additional Perils” (Section 7), is described as covering the “cost of repairs or loss of or damage to Subject Matter of this insurance” when caused through “negligence, incompetence or error of judgment . . . of any person whatsoever,” through “latent defect,” or “from other causes of whatsoever nature arising either on shore or otherwise, howsoever causing loss of or injury to the property hereby insured.”
Another, the “Liner Negligence Clause” (Section 21), is quoted as covering “breakdown of motor generators or other electrical machinery and electrical connections thereto, bursting of boilers, breakage of shafts, or any latent defect in the machinery or hull,” as well as loss or damage to the subject matter insured directly caused by “accidents on shipboard or elsewhere” and by “negligence, error of judgment or incompetence of any person.”
The provision is said to exclude only “the cost of repairinga, replacing or renewing any part condemned solely as a result of a latent defect, wear and tear, gradual deterioration or fault or error in design or construction,” provided such loss has not resulted from want of due diligence by the assureds, owners, or managers of the vessel.
The dispute arises out of four tugs built by Nichols Brothers Boat Builders in Washington, using azimuth stern drive propulsion units manufactured by Kongsberg Maritime Finland Oy and Kongsberg Gruppen ASA. The tugs were delivered between April 2020 and June 2021.
Once in service, the filing says, internal components of the thrusters, including slewing bearings, slewing rings, and O‑rings, began to destroy themselves, while the installation frameworks suffered fatigue damage at the points where the thrusters attach to the hull.
Foss and Northwest Tug Leasing contend that the principal root cause was Nichols’s installation of a single‑bearing thruster instead of the contract‑specified double‑bearing thruster, without adjusting the design and construction of the installation framework and vessel hull. They also allege that the thrusters themselves had latent design defects.
By their account, they have spent over $2.5 million on repairs, and updated summaries put past repair costs at $2,501,835.60. Separate arbitrations against Nichols and Kongsberg, begun in March 2024 and June 2024, are described as pending, and the filing states that, by virtue of its potential subrogation rights, Navigators stands to benefit from any recovery obtained from Nichols or Kongsberg.
On the claims side, the plaintiffs state that they first notified Navigators of damage to three tugs on January 25, 2021, and to the fourth tug on July 28, 2022. They say Navigators acknowledged receipt of these notices but, as of March 4, 2025, had neither accepted nor rejected their claim for coverage, had not offered any substantive or written explanation of its coverage position, had not reimbursed any past repair costs, and had not paid any legal fees or related arbitration costs, nor committed to indemnify future repair costs.
The suit seeks damages for alleged breach of contract, including alleged breach of duties to investigate and indemnify, and for alleged breach of the common‑law duty of good faith. It also brings claims under Washington’s Consumer Protection Act and the Insurance Fair Conduct Act, including requests for actual damages, attorney fees, litigation and expert costs, and potential treble damages.
