More than two years after Superstorm Sandy battered the East Coast, New York courts are continuing to grapple with a slew of insurance coverage issues tied to the storm.
Those lawsuits and other high-stakes battles, including JPMorgan Securities Inc.’s bid for $200 million in coverage for regulatory settlements and an attorney-client privilege dispute with potential implications for professional liability coverage actions, have lawyers’ attention. Here, experts discuss five issues they’re keeping a close eye on.
Among the most notable issues being litigated in Sandy coverage suits is the interplay between deductibles, additional coverage grants, sublimits and causation, said Sherilyn Pastor, the practice group leader for McCarter & English LLP’s insurance coverage group.
For instance, in the case of El-Ad 250 West LLC v. Zurich American Insurance Co., the policyholder — a Manhattan real estate developer — purchased additional coverage for delay in completion risks. The trial judge ruled, in a case of apparent first impression, that a $5 million limit in a Zurich American Insurance Co. policy for flood losses applies to the developer’s claims for construction delays stemming from Sandy.
On appeal, the policyholder is contending that the Zurich policy’s $7 million sublimit was the proper cap.
“How the issue plays out, ultimately, will be important, not only for this particular policyholder and on this type of policy, but more broadly when it comes to the interplay, if any, among coverages, additional coverages, sublimits and/or deductibles,” Pastor said.