Strong Pipkin Successfully Recovers For Policyholder From London insurers

Strong Pipkin’s client purchased an “all risk” insurance policy subscribed to by national and international insurers, including various syndicates of Lloyd’s of London. The policy covered the insured’s West Texas wind farm. The policy contained a London Engineering Group 1/96 endorsement, excluding coverage for design and manufacturing defects. After a fire destroyed a multimillion dollar wind turbine, the insurers initiated an investigation. They continued to investigate the loss, without making a coverage determination, for two and a half years, continually claiming the need for more documents and data. After fending off the insurer’s preemptive, federal declaratory judgment action due to lack of complete diversity, the policyholder filed suit in state court claiming breach of contract, common law bad faith, and violations of Chapters 541 and 542 of the Texas Insurance Code. The insurers filed a motion for summary judgment seeking to avoid coverage by claiming New York law would bar recovery because suit was not filed by the policyholder within one year of the fire. Following a deposition of the outside claim adjuster and briefing to the court regarding the application of Texas law, which would render the one year suit limitation provision void, the insurers resolved the case on a very favorable basis to the Policyholder.

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