Two storms: One or two deductibles?

Patrick Bracher, Norton Rose Fulbright

A Louisiana court excused Lloyd’s of London and other insurers from a $7 million claim for the second of two storms, finding that the deductible of $10 million per occurrence applied.

The insured sought to argue that the damage to their oil rigs suffered from a storm in February 2010 that cost $17 million to repair was related to the second loss. The insured asserted that, but for the damage in February 2010, there would not have been further damage from the storm in July 2010. The court held these were undoubtedly two occurrences each causing their own damage and each subject to a $10 million deductible.

This is one of the less convincing arguments to avoid the consequences of a deductible.

(Seahawk Liquidating Trust v Certain Underwriters at Lloyd’s, London, et al.)

First published by : Financial Institutions Legal Snapshot