Intended as a tutorial or not, Louisiana Federal District Court Judge Sarah Vance wrote one in her pick ’em up – put ’em down examination of the case law on proof of loss and segregation of damages. Follow her through the process that leads to an insurer must also make a specific showing of what damage was caused by the excluded cause. (Order and Reasons Imperial Trading v Travelers )
The plaintiffs in this case are the owners and lessees of commercial properties that were damaged during Hurricane Katrina. At the time of the hurricane, the properties in question were insured by defendant Travelers Property Casualty Company of America. Plaintiffs submitted a claim to Travelers shortly after the hurricane, and Travelers advanced plaintiffs $1 million for the covered losses to one property on September 25, 2005. Plaintiffs claim that Travelers failed to participate in the adjustment process in good faith after that point, reimbursing plaintiffs for portions of the covered loss in small increments over the following year but denying coverage for several claims falling under the coverage of the policy.
The plaintiff’s claim at issue in this order is for a loss of more than $8,000,000. Both parties filed motions for partial summary judgment – plaintiffs’ as to burdens of proof and segregating damages; defendant’s as to plaintiffs’ claim for damages to contents.
The parties agree that such stock was covered by the insurance policy and that it was damaged. The policy notes that the insurer “will pay for direct physical loss or damage to Covered Property caused by or resulting from a Covered Cause of Loss.” “Covered Cause of Loss” is defined as “risks of direct physical loss” unless the loss falls into a particular exclusion. “Stock” is included among the Covered Property section, and is defined elsewhere as “merchandise held in storage for sale, raw materials and inprocess or finished goods, including supplies used in their packing or shipping.”
(drumroll)
The Lesson: Who bears the burden of segregating covered from non-covered losses once and insurer shows that an exclusion applies to some loss? Continue reading “Federal District Court Judge offers tutorial – proof of loss and segregation of damages”
