One of the most litigated issues in the Gulf States in the wake of Hurricane Katrina was whether flood exclusions bar coverage for loss by storm surge. The courts ultimately decided that the answer was yes. The Superstorm Sandy jurisdictions have yet to address that question, but a recent federal case in New York suggests that the matter will ultimately be resolved in the same fashion in the Empire State. The decision is New Sea Crest Healthcare Center, LLC, et al. v. Lexington Ins. Co., — F.Supp.2d —, 2014 WL 2879839 (E.D.N.Y., June 24, 2014). At present, the issue will not crop up nearly as frequently as it did in the wake of the 2005 storm because Katrina taught a…
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New York Court: All Sandy Losses, Including “Downstream” Financial Ones, Capped By Annual Aggregate Limit For Flood
Superstorm Sandy jurisprudence is starting to shed light on some unresolved issues in the effected states. In El-Ad 250 West LLC v. Zurich American Ins. Co., — N.Y.S.2d —, 2014 WL 2931058 (N.Y.Cty., June 27, 2014), a New York court held last week that a $5 million annual aggregate limit of liability for losses caused by flood capped any recovery for all such loss, without regard to whether it was physical damage to property or a “downstream” financial loss such as delay in completion. It was a case of first impression in New York. On October 29, 2012, the policyholder, El-Ad 250 West LLC, was converting an 11-story office building into a 12-story luxury condominium complex in lower Manhattan. Superstorm…
A New York Court Bars Coverage for a Power Outage Caused by Superstorm Sandy
This week saw a New York court bar a policyholder’s claim for business interruption occasioned by the loss of off-site power after Superstorm Sandy. In Johnson Gallagher Magliery, LLC v. Charter Oak Fire Ins. Co., 2014 WL 1041831 (S.D.N.Y., March 18, 2014), the federal court held that a law firm could not recover for the six-day period during which one of Consolidated Edison’s networks was out-of-service. The network was shut down preemptively several hours before the storm, and the contract of insurance’s “acts or decisions” exclusion was held to bar coverage for that period of time. In addition, a “water” exclusion operated to preclude coverage for the time necessary to clean, repair, and re-energize the system after the flooding where…
Tagged with: New York
Posted in Acts or Decisions, Business Interuption, Direct Physical Loss or Damage, Flood, Superstorm Sandy
Posted in Acts or Decisions, Business Interuption, Direct Physical Loss or Damage, Flood, Superstorm Sandy
Federal Courts In New York and New Jersey Explore Streamlining Superstorm Sandy Discovery
Despite opposition by both many attorneys and the Federal Emergency Management Agency (“FEMA”), the federal court for the Eastern District of New York has now taken the first steps towards grouping some of the hundreds of pending Superstorm Sandy cases and expediting discovery in all of the them, and the District of New Jersey appears very likely to follow suit. Superstorm Sandy is now officially the second most costly storm in United States history, having caused over $50 billion in damages, and one of the most heavily-impacted jurisdictions was the United States District Court for the Eastern District of New York. The Eastern District comprises Staten Island and all of Long Island, including the New York City boroughs of Brooklyn…
