Trinity Industries v. Insurance Co. of N. America (The Leam Alabama) - U.S. Court of Appeals (5th Circuit) (Wisdom, King & Barksdale C.JJ.) - 2 November 1990

Insurance - Builder’s risk policy - Whether covering cost of repairing builder’s mistakes in construction of vessel

By a builder’s risk insurance policy on the American Institute Form (1 December 1959) the defendant agreed to insure the Leam Alabama “against all risks of physical loss . . . or damage”. The vessel was one of six then under construction pursuant to an agreement between the plaintiff, as builder and Leam Transportation, Inc., as buyer, dated December 1980. She was delivered in February 1982 after incline and stability tests, which were attended by a representative of the buyer. At the time of the tests, though not disclosed to the buyer, it was known that a mistake in construction caused the starboard aft corner of the vessel to be 7 to 12 inches lower than the port side.