Sixth Circuit Broadly Construes Policy Sublimit, Limits Recovery for Thai Factory Flood

September 16, 2019
Lorelie S. Masters, Michael S. Levine & Geoffrey B. Fehling - Hunton Insurance Recovery Blog

A federal appeals court reversed an auto parts manufacturer’s summary judgment win, construing a policy limitation on flood hazards to apply broadly to all types of losses, even though the limit “does not expressly say what losses it limits.” In Federal-Mogul LLC v. Insurance Company of the State of Pennsylvania, manufacturer Federal-Mogul suffered more than $60 million in property and time-element losses following a 2011 flood in one of its factories in Thailand. Federal-Mogul submitted a claim to its insurer, but the insurer refused to pay more than $30 million because the flood occurred in a high hazard flood zone, to which the insurer argued a sublimit in the policy applied.

Reprinted courtesy of Peckar & Abramson, PC attorneys Lorelie S. Masters, Michael S. Levine and Geoffrey B. Fehling
Mr. Masters may be contacted at lmasters@HuntonAK.com
Mr. Levine may be contacted at mlevine@HuntonAK.com
Mr. Fehling may be contacted at gfehling@HuntonAK.com



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