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Clark & Fox partners, Gabrielle Puchalsky and Joshua Seltzer recently represented a large insurance market consisting of domestic and international carriers at a binding arbitration regarding damages allegedly caused by Tropical Storm Alberto. The panel unanimously found in the market’s favor that no further coverage was owed to the insured, despite the insured’s claim that they were owed in excess of $1,000,000 for property damage to the building and stock, and for business interruption.

Tropical Storm Alberto made landfall in Panama City Beach, Florida, on or about the evening of 28 May 2018, raining for a few days. The insured operated a souvenir shop and claimed that wind damaged a large window in a storage room, the roof, and two exterior doors, causing water to enter and further damage the building and various inventory/stock, the majority of which were “boxed” t-shirts and decals (for t-shirts) located in two interconnected storage rooms. Following the initial claim adjustment, payment of the undisputed damage and invocation of arbitration, Clark and Fox was retained by the market subject to the policy’s choice of law clause, requiring that New York law apply.

The firm successfully argued:

1. To dismiss the business income claim at the outset as (a) untimely and (b) not resulting from a covered cause of loss;
2. To dismiss the building claim based upon no insurable interest in the subject damaged building;
3. The insured misrepresented on its proof of loss that it “owned” the building, and was, at most, a lessee;
4. That the insured’s contents claim should be dismissed as it was already made whole by the insurers, and that any additional damages claimed were the result of long-term water intrusion due to lack of maintenance, faulty workmanship and repairs, and long term wear and tear, all excluded causes of loss;
5. Bad faith and any other extra contractual damages were not available here; and,
6. That the policy’s named storm deductible was property applied.

Clark & Fox stressed to the panel that the insured has more than been made whole, arguably received a windfall based on the amount it was paid to date, and that any additional recovery would be barred as either not covered, excluded, or by long standing points of New York law regarding insurable interest and extra contractual damages.

The panel expressly found that the market was not obligated to make any further payment with respect to this claim.

Clark & Fox is a firm of experienced lawyers with diverse international practices that focus on representing the interests of the insurance industry. Information about all of Clark & Fox’s locations, attorneys, and practice areas is available on http://www.clarkfoxlaw.com/

For more information, please contact:

John M. Clark, CEO/President:
Gabrielle Puchalsky/Partner:
Joshua Seltzer/Partner: