First Party Property Coverage
Steptoe & Johnson LLP represents major national and international carriers from all the major insurance markets in complex, large-value first party coverage disputes, under a full range of commercial property policies, as well as both facultative and treaty reinsurance exposures. Our representations include advising insurers and reinsurers over the course of claim adjustment on coverage, allocation, aggregation, and strategic approach.
For those claims which cannot be resolved, Steptoe’s practice encompasses litigation, arbitration, and alternative dispute resolution mechanisms. In the United States, our practice includes trial and appellate appearances before state and federal courts, as well as arbitrations throughout the country. In London, Steptoe represents clients in the high court and all levels of appeal courts, as well as in institutional and ad hoc arbitrations.
Steptoe provides advice regarding a broad spectrum of issues, including, among others:
- Threshold questions of whether coverage is provided by all-risk, DIC/DIL, and CAR/EAR policies, including the construction and effect of exclusions from coverage.
- Loss during policy period, known loss, loss in progress, and other fortuity issues.
- Trigger and number of occurrences/aggregation.
- Late notice and suit limitation.
- Environmental clean-up costs, mold claims, and pollution exclusions.
- Settlement and other earth movement claims.
- Coverage for unscheduled and newly acquired locations.
- Actual cash value v. replacement cost, depreciation, holdback, appraisals, and other valuation issues.
- Code compliance and code upgrade coverage.
- Reconciling coverages provided by other insurance, allocation of losses among policy periods, and offsets.
- Business interruption/contingent business interruption and other time element damages.
- Good faith claims handling and payment.
- Jurisdiction and governing law, and subrogated recoveries.
Our experience includes claims arising out of large catastrophe losses, such as Hurricane Katrina and the terrorist attacks of 9/11, as well as fire, ground-movement, environmental, and other losses. Examples of matters we have handled include the following:
- Board of Trustees of the Galveston Wharves v. Lexington Ins. Co., et al. (10th Judicial District Court, Galveston County, Texas, Case No. 11-CV-1330). Represented Lexington in Texas state court in a multimillion-dollar claim alleging that the Port of Galveston suffered flood and storm surge damage as a result of Hurricane Ike. Case settled before trial.
- International coordinating counsel for a major carrier for claims arising out of the earthquake and tsunami in Japan in March 2011. Supervised counsel in Europe and Japan to provide a consistent and coordinated response to common claims issues, including issues arising out of Master/Local coverage programs. Prepared analysis of various coverage issues, under carrier’s form and manuscript forms of various major brokers, including contingent business interruption, power outage, civil authority, nuclear hazards, and others. Created a claims handling guide for use by front line adjusters addressing these issues.
- Strouse Greenberg Properties IV LP v. Lexington Insurance Co. (Civ. Dist. Ct. Parish of Orleans, State of La. No. 2007-8378). Represented Lexington in Louisiana state court in New Orleans in a multimillion-dollar claim arising out of wind and flood damage caused by Hurricane Katrina to an apartment complex in New Orleans East. Case settled after first week of trial.
- Guardian Indus. Corp. v. Aon Rush Services, Inc. of Michigan, et al., (Case No. 07-087680-CK (Mich. Cir. Ct. Oakland Cty)). Represented Steadfast Insurance Company and Zurich American Insurance Company with respect to a property claim brought by Guardian Industries.
- Represented carrier in a property damage and stock loss claims case arising from damages to a cigarette factory at the Korangi Industrial Estate in Karachi, Pakistan following the assassination of Benazir Bhutto in 2007.
- Legend Asset Mgmt v. Lexington Ins. Co. (Texas state court, Austin, Tx., Suit No. NYBG-04016). Represented Lexington in multimillion-dollar claim asserting damage to seven apartment complexes in Texas allegedly due to soil movement. Case settled after mediation.
- ALCOA Inc. v. Accident & Cas. Ins. Co. (Sup. Ct. of Wash., King County, Case No. 92-2-28065-5 SEA). Represented carrier in multimillion-dollar action seeking to recover under first party policies for environmental clean-up costs incurred by policyholder.
- United Techs. Corp. v. Am. Home Assurance Co. (D. Conn. Civ. No. 292-CV-00267 (JBA)). Represented American Home in multimillion-dollar action seeking to recover under first party policies for environmental clean-up costs incurred by policyholder.
- PPG Indus., Inc. v. American Home Assurance Co. (2007 WL 2350646, Sup. Ct. of N. J., App. Div., Aug. 20, 2007). New Jersey appellate court affirmed summary judgment against claims for environmental clean-up costs on grounds that suit was not initiated within 12-month suit limitation period.
- Toll Naval Assoc. v. Lexington Ins. Co., (US District Court, Eastern District of Pennsylvania, Civil Action No. 03-CV-6537). Represented Lexington in a multimillion-dollar claim arising out of an arson fire at a historic structure in Philadelphia. Obtained summary judgment against plaintiffs’ bad faith claim; remainder of case settled before trial.
- Key3Media Group, Inc., v. Commerce and Indus. Ins. Co. (Sup. Ct. State of Ca. County of Los Angeles, Case No. BC278751). Represented Commerce and Industry in multimillion-dollar claim for business interruption losses stemming from the terrorist attacks of 9/11. Obtained summary judgment against coverage and bad faith claims.
Steptoe’s London office acts for the Lloyd’s and London Company markets, major European insurers and reinsurers, and Bermudian companies. As with our US practice, the members of the team have acted on major catastrophe losses including commercial property, engineering, construction, machinery and breakdown, and power generation. The following are representative matters which the team are currently or have acted on in recent years:
- Panamanian Power Plant – Claim for property damage and business interruption following the use of contaminated bunker fuel oil. Acting for European, North, South American, and Central American power plant markets.
- Shopping Center in Central America – In respect of a substantial notification arising from damage allegedly caused to a retail center.
- Hurricane Ike – Coverage advice for a major European reinsurer in respect of a significant claim arising out of the flooding of a LPG refinery in the course of construction.
- Hurricane Katrina – Numerous large value property and business interruption matters. Includes acting for a London insurer on a large property damage and business interruption claim by a major hotel group in which an appeal judgment was handed down in favor of our client.
- Defective warehouse – Represented the Lloyd’s market in respect of claims under multi-year DIC/DIL programs regarding defects in the concrete slabbing at a distribution warehouse in England.
- 9/11 – Advised London Insurers and Reinsurers concerning property damage to cargo interests and contingent business interruption/denial of access claims by a major hotel and ferry operator.
- CAR/EAR – Advised insurers and reinsurers in respect of DSU claims for pipeline construction projects in South America, and coverage for claims relating to T & D elements of electrical generation plant. Advised on coverage for a London insurer relating to a major turbine loss in Mexico. Also provided coverage advice related to a catastrophic failure of a deep water harbor protection system (constructed of “Acropods”) arising from a hurricane.
- Machinery & Breakdown/Turbine failures/power generation – Advised the London market in respect of turbine/power generation failures in a number of Central American jurisdictions and the Far East.
- Binding Authorities – Acted for Markel International Insurance Company Limited in claims against holders of a Binding Authority for the issuance of construction performance bonds, succeeding in obtaining judgment for fraud, dishonesty, conspiracy, and breach of fiduciary duty: (Markel International Insurance Company Limited v. Timothy Higgins (Court of Appeal)  EWCA Civ 790, Markel International Insurance Company Limited v. Surety Guarantee Consultants Limited & Ors  EWHC 1135 (Comm), Markel v. SGC & Ors  EWHC 3087 (Comm). Also advised and arbitrated on behalf of the Lloyd’s market regarding US cargo and trucking risks.