National Union Fire Insurance, Lloyd's, ACE and 11 other carriers will need to fork out almost US$72 million to Tenessee-based Lion Oil Co after it won a jury verdict in the United States District Court in El Dorado, Arkansas last week.
Lion sued its 14 insurers in 2013 over essentially identical all-risk policies it bought from each of them, after they refused to pay out for business interruption losses resulting from a ten-month pipeline shutdown after the rupture of the Exxon Mobil-owned pipeline running from Louisiana to Longview, Texas.
The Western District jury found that the rupture caused Lion Oil's damages and awarded a payout of almost US$72 million against National Union Fire Insurance Co. of Pittsburgh, Lloyd's of London underwriters, ACE American Insurance Co. of Philadelphia and 11 other carriers for Lion's loss of earnings.
The pipeline was the primary source of crude oil feedstock for Lion Oil's refinery in El Dorado, Arkansas. Lion Oil kept the facility up and running during the shutdown, but was damaged US$72 million in lost earnings and expenses for alternative transportation, sale and storage and argued that this was covered in the all-risk policy.
