Foss Maritime is suing three insurance companies in federal court over unresolved claims related to damage to tugboats. The dispute centers on four tugs that experienced serious mechanical problems, leading to costly repairs that the insurers have not fully covered.
On December 11, 2025, Foss Maritime Company, LLC, and Northwest Tug Leasing, LLC filed a lawsuit in the U.S. District Court for the Western District of Washington, Seattle. They named Navigators Insurance Company, Zurich American Insurance Company, and Ascot Insurance Company as defendants. The case focuses on hull and machinery insurance policies covering the four tugs and accuses the insurers of failing to take a clear stance or pay for repairs despite years of claims.
The plaintiffs say they purchased a series of one-year Marine Hull/Liability Package insurance policies from 2018 through 2024. Navigators Insurance acted as the lead underwriter for four annual policies relevant to this claim, covering the period from March 2020 to March 2024. Foss and its affiliates have paid the premiums and are listed as named Assureds on these policies.
The complaint highlights two specific insurance clauses. The first, called "Additional Perils," covers the costs of repairs or damage caused by negligence, latent defects, or other unspecified causes. The second, the "Liner Negligence Clause," protects against damages caused by accidents, mechanical breakdowns, or negligence. However, these provisions exclude costs related to wear and tear or defects arising from a failure to exercise due diligence.
The problem at the core of the lawsuit involves the four tugs, built between April 2020 and June 2021 by Nichols Brothers Boat Builders in Washington. These tugs use azimuth stern drive propulsion units made by Kongsberg Maritime Finland Oy and Kongsberg Gruppen ASA. Shortly after entering service, critical components inside the thrusters, such as bearings and O-rings, started to fail. At the same time, the framework holding the thrusters to the hull developed fatigue damage.
Foss and Northwest Tug Leasing argue that Nichols Brothers installed single-bearing thrusters, even though the contract called for double-bearing models. They claim Nichols failed to adjust the installation design and hull construction to account for this change. The plaintiffs also suspect the thrusters themselves had hidden design flaws.
So far, Foss and its affiliates say they have spent more than $2.5 million on repairs. They are also involved in separate arbitration cases against Nichols Brothers and Kongsberg, which began in 2024. The insurers, especially Navigators, could benefit from any recoveries in those cases due to subrogation rights.
The suit further claims that the insurers, particularly Navigators, were notified of damage to three tugs in January 2021 and to the fourth tug in July 2022. Although Navigators acknowledged the notices, the plaintiffs say the insurer has never clearly accepted or denied the claims. As of March 2025, Navigators had not reimbursed any repair costs, paid legal or arbitration fees, or committed to cover future expenses.
The lawsuit accuses the insurers of breaching their contract and failing to investigate and pay claims properly. It also includes allegations of bad faith and violations of Washington state consumer protection and insurance laws. The plaintiffs are seeking damages, attorney fees, and potentially triple damages under state statutes.
This case shines a light on the often slow and disputed process of insurance claims in the maritime industry, especially involving costly vessel repairs. Foss Maritime’s suit underlines the challenges ship operators face when insurers stall or refuse to cover what operators believe are valid claims. The coming months will show how the court handles these complex insurance issues and whether Foss and its partners can recover their significant repair costs.