Insurers Seek to Void Marine Insurance Policy After Partial Sinking of Yacht M/V FINA in the Bahamas
A group of insurers including Accelerant Specialty Insurance Company, Hadron Specialty Insurance Company, and certain Lloyd’s of London underwriters have filed a maritime declaratory judgment action in the U.S. District Court for the Southern District of Florida. The case, Accelerant Specialty Insurance Company et al. v. Perseus Ventures LLC, under Case No. 0:25-cv-62342, seeks to declare a marine insurance policy void following the partial sinking of the M/V FINA on July 7, 2025, in Bahamian waters.
Yacht Partially Sinks During Voyage From Nassau to Bimini After Engine Compartment Floods
The incident at the heart of the lawsuit occurred while the insured vessel—a 2020 44-foot Fountaine Pajot power catamaran—was en route from Nassau to Bimini. According to the complaint, the vessel, operated by licensed captain Julio Eduardo Araque Vivas, began taking on water in the port-side engine compartment after black smoke was observed. Despite sending a distress signal, no immediate VHF response was received. Rescue efforts were initiated by the Royal Bahamas Defense Force and a marine salvor who eventually towed the vessel to safety.
The alleged source of the flooding was a detached port engine exhaust discharge hose. The insurers argue this failure resulted from improper maintenance, pointing to accumulated soot and pre-existing overheating issues with the port engine, which had been serviced twice in the days leading up to the voyage.
Insurers Claim Marine Policy Is Void Due to Material Misrepresentations and Lack of Seaworthiness
The plaintiffs are seeking a declaratory judgment that the policy issued to Perseus Ventures LLC is void from inception based on several theories of maritime law. Central to their claims is the doctrine of uberrimae fidei, or utmost good faith, which requires insureds to fully disclose material facts relevant to underwriting decisions. The insurers allege that Perseus and its beneficial owner, Victor Ballestas, failed to disclose critical information across four consecutive policy applications, including multiple driver license suspensions, prior marine losses, and a theft claim involving a Jet Ski.
They also claim that the vessel was not seaworthy at the time it departed, citing the recent engine overheating issues and improper repair methods. The complaint asserts that Perseus bypassed a required sea trial after servicing and failed to detect the risk of mechanical failure that ultimately led to the flooding.
Lawsuit Cites Breach of Express and Implied Warranties of Seaworthiness Under Marine Policy
In addition to alleging misrepresentation, the insurers claim breach of both the implied negative warranty of seaworthiness and the express warranty of seaworthiness in the policy. The policy, which carried a hull coverage limit of $1,075,000 subject to a $21,500 deductible, required that the vessel be seaworthy at all times.
The insurers contend that the detachment of the engine exhaust hose—believed to be caused by a buildup of pressure due to soot accumulation—was the direct result of the vessel’s unseaworthy condition. Moreover, they argue that Perseus knowingly allowed the yacht to “break ground” despite known mechanical issues, thereby breaching its duty.
Plaintiffs Argue Loss Does Not Meet “Accidental External Event” Coverage Trigger Under Policy Terms
Another critical argument in the complaint is that the loss is excluded under the marine policy’s “accidental external event” clause. The insurers claim that damage to the vessel’s engines and mechanical systems is only covered if caused by an event such as a collision, grounding, lightning strike, or fire. Since the water ingress allegedly stemmed from a detached exhaust hose without any external catalyst, plaintiffs assert that the loss is excluded from coverage under Exclusion xviii of the policy.
Declaratory Judgment Action Seeks to Deny Claim for Yacht Sinking Based on Maritime Insurance Law
Through five separate counts, the plaintiffs seek a declaration that the policy is void and that no coverage exists for the July 2025 incident. The action highlights the complexity of marine insurance law, where full disclosure and seaworthiness are not just contractual expectations but legal prerequisites for coverage.
The court will be asked to rule on whether Perseus’s alleged misrepresentations and the condition of the M/V FINA at the time of departure justify denial of the insurance claim and voiding of the contract ab initio.
Disclaimer: Our firm does not represent the plaintiff in this case and is not involved in the litigation. The information provided is a summary of allegations based on publicly available court filings. We make no representations about the truth of these allegations, are not commenting on the merits of the case, and are not predicting any outcome.
