Louisiana insurer fights claims payout for flooding damages

A Baton Rouge insurance company alleges it holds no responsibility for the damage, filing a declaratory injunction with a US District Court

Insurance News

By Lyle Adriano

An insurance company alleges that its policy explicitly does not provide coverage for damages on a building’s foundations, according to report from the Louisiana Record.

Earlier this month, United Specialty Insurance Company (USIC) filed a declaratory injunction in U.S. District Court for the Middle District of Louisiana against Tara Corp, alleging that it holds no responsibility for coverage for foundation damages.

The insurer asked the court to declare that it does not owe any further payments to Tara, and is not obligated to pay the Tara’s income loss as well.

According to the complaint, Tara Corp was issued a commercial lines policy for June 7, 2014-June 7, 2015 by USIC for a shopping center owned by the former in Baton Rouge. The suit said that the policy provided building coverage of up to $1.5 million and a $1,000 deductible, with a business income and/or extra expense with rental value coverage of up to $30,000.

The lawsuit further stated that on March 23, 2015, a water sprinkler pip running beneath the foundation of the building burst, flooding a store and purportedly causing severe water damage to the establishment. The burst pipe also allegedly caused damage to the foundation.

USIC claimed that it had covered the costs for the damages, and had issued checks amounting to $134,073.18 on May 29, 2015. The insurance company, however, alleges that under the provisions of the coverage provided it to Tara the insurer does not cover damages to the foundation, nor for repairs to the foundation.

Repairing the foundation could potentially involve repairing pipes, drains, and the land itself. It could also entail removing a portion of the slab to restore subterranean soil, then replacing the slab.

The USIC is considering further relief including costs related to this case.
 

Keep up with the latest news and events

Join our mailing list, it’s free!