In a recent trial, a jury awarded $21 million to a grocery store chain and its owner against their insurer for the insurer’s unreasonable failure to pay for Katrina-related damages sustained to several of their stores.  The trial in the case of Marketfare Annunciation, LLC, et al. v. United Fire & Casualty Insurance Com, et al., took place in federal court in Louisiana.

The grocery store chain’s owner purchased insurance for loss arising from property damage, business interruption loss, business personal property loss, and commercial crime loss.  The lawsuit involves five of his stores damaged by Katrina’s winds and flooding resulting from the levee breaches in the New Orleans area.  He submitted claims under various commercial property insurance policies.  The insurer paid a portion of the submitted claims but denied most of the submitted claims on the basis that the insured’s damages were related to flooding due to levee breaches which was not covered under the policies.

On June 2, the jury returned a verdict in favor of the insured, finding that five of the insured’s stores sustained damages that fell under the scope of the insurance at issue.  It also held that the insurer acted in bad faith by suspending claims payments when they should have been paid.  The insurance company may appeal the verdict.

Click here to read the Judgment.

We will continue to provide updates on Katrina-related coverage litigation on InsureReinsure.com.