A winery in Calistoga, CA is suing its excess insurer, claiming that it was sold a “useless” insurance policy after the insurer refused to cover wildfire-related damages.
Fairwinds Estate Winery filed its complaint in Napa County Superior Court, accusing Kinsale Insurance Company of bad faith by denying a $2 million claim for damages the winery suffered following the 2020 Glass Fire, Napa Valley Register reported.
According to Fairwinds, it was covered by two policies at the time of the wildfire on September 27, 2020. The first was an $8.2 million main policy with Beazley Insurance Services, and the other was an excess insurance policy with Kinsale for $2 million, which was intended to cover any damage that went beyond the limit that Beazley could cover.
When the wildfire destroyed Fairwinds’ main building and tasting room, the winery had anticipated that the excess policy would trigger, since it believed that property losses were higher than the combined coverage, the lawsuit said.
However, Kinsale refused to pay Fairwinds’ claim. According to the complaint, Kinsale argued that Beazley’s coverage was adequate enough to cover the winery’s losses. Court documents also noted that Kinsale had assessed the value of Fairwinds’ main building and tasting room to $4,505,893 – an amount less than the value covered by Beazley, and thus Kinsale maintained that it does not owe Fairwinds anything.
“Under Kinsale’s interpretation, Fairwinds could never suffer loss sufficient to trigger coverage under the excess policy,” Fairwinds argued in its lawsuit.
Fairwinds also claimed in its suit that Kinsale’s total valuation of the main building, tank building, tasting room, business personal property and outside equipment totaled $6,542,831, but the company had agreed to sell Fairwinds an additional $2 million policy anyway.
“Thus, even if Fairwinds lost every single piece of property in a wildfire, because the underlying policy’s coverage limit is greater than that amount at $8,310,000, coverage under the excess policy would not be triggered,” the lawsuit said.
Napa Valley Register said that no trial date had been set for the lawsuit, but a status conference is set for February next year.