Trials & Litigation

Cleary Gottlieb seeks $3M for Hurricane Sandy damage in suit filed against law firm's insurer


Hurricane Sandy’s storm surge shut down electric service, heat and telephone service for several days in 2012, and it resulted in a $3 million loss of business to Cleary Gottlieb Steen & Hamilton, the New York law firm says in a lawsuit filed against its insurance company.

But although the firm paid Federal Insurance Co. “several hundred thousand dollars in premiums” for business-interruption coverage that should have covered the firm’s losses due to the outage, the carrier has refused to ante up, the firm says in a motion for partial summary judgment (PDF) filed Jan. 31 in the Manhattan Supreme Court case. The New York Law Journal (sub. req.) provides a link to the filing in an article about the case.

Although the firm’s policy contained a flood exclusion, Cleary Gottlieb says it was trumped by an endorsement that extends coverage for lost business income.

“Because the correct interpretation of the policy language is a matter of law for the court to decide, the Insured brings this motion for partial summary judgment seeking a ruling that the insurer is liable under the policy for the business income the Insured lost because of the loss of utilities caused by flooding,” says the law firm in the motion. “The policy unambiguously requires the Insurer to provide coverage, and even if this court finds the policy language ambiguous the law requires that any ambiguity be resolved in favor of the insured.”

Related coverage:

ABAJournal.com: “Closed by lack of power after Hurricane Sandy, law firm battles insurer over flooding exclusion”

ABAJournal.com: “Hurricane Sandy still a daily reality for law firms left homeless by the storm”

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