Title Insurance did not Include Casino Vessel Being Built
The U.S. Court of Appeals for the Fifth Circuit ruled that title insurance written to cover a real estate project for a gaming development did not include a casino vessel that was under construction at a distant location. In the instant case, a financial institution loaned monies to a casino company to build a gaming development. The development was to include both a landside infrastructure and a casino vessel. The casino vessel was to be built at a remote location and towed to the site when completed. The insurance used to protect to investment was a slightly modified version of a standard real estate title insurance policy. Construction of the casino vessel went far over budget and the shipyard brought suit, forcing the gaming company into bankruptcy. The financial institution then attempted to recover its losses from the insurance company. The court held that the policy as written did not include coverage of the financial institution’s security interest in the casino vessel. In the Matter of Biloxi Casino Belle, Inc., No. 03-60348 (5th Cir.) - HK Law.