Many marine claims arise from thefts/fires in warehouses. Part of the usual subrogation investigation includes, depending upon the particular facts, determining if a security company negligently designed the alarm system or failed to detect the cause of the claim.

In cases where the cargo-owner also directly owns the warehouse, a subrogated carrier may seek to allege breach of contract causes of action against the security company. Many such cases are often defeated by a waiver of subrogation clause routinely contained in the applicable security contract.

In one recent case, National Union Fire Insurance Company of Pittsburgh, Pennsylvania v. Tyco Integrated Security, LLC (13-cv-80371) pending in a District Court in Florida, the subrogated carrier alleged that the security company inadequately protected sensitive information that enabled thieves connected to a Florida-based burglary ring to break into an Eli Lilly & Co. warehouse located in Enfield, Conn., in 2010 and steal more than $60 million worth of prescription medication.

Tyco moved to dismiss the lawsuit, in part, by arguing that the subrogation waiver precluded suit.  The court denied the motion.  

In allowing the claims to proceed to trial, the federal judge opined that “[t]he claims pursued by National Union do not relate to the provision of security services or any related obligations, but instead focus on extracontractual events, namely, the failure to safeguard confidential information and the failure to disclose prior incidents. These occurrences and alleged failures exist independent of the 2004 contract.”

In sum, a good investigation into how cargo thieves breached a facility may allow a subrogated carrier to circumvent a Waiver of Subrogation defense.