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What happens when an insurance carrier, its underwriter, a broker and the insured all forget to make sure a sublimit endorsement on wind-driven rain losses is included in a multi-million dollar property policy?
In the case of a Liberty Mutual subsidiary, the underwriter was reprimanded and stripped of some authority; the broker, J. Smith Lanier & Co., was sued by the client, RPG Hospitality LLC, owner of a DoubleTree Hotel in North Carolina; and after a storm hit, the hotel company ended up tearing down part of the damaged building and undertook millions in renovations, thinking it was covered for the work.
But Liberty Mutual’s excess and surplus lines unit, Ironshore Specialty Insurance Co., won a reprieve and is off the hook for a $26 million judgment against it, thanks to a favorable Georgia Court of Appeals decision handed down last week.
Sublimit Left Out of Policy, But Liberty Mutual Firm Avoids Huge Payout Anyway
In the case of a Liberty Mutual subsidiary, the underwriter was reprimanded and stripped of some authority; the broker, J. Smith Lanier & Co., was sued by the client, RPG Hospitality LLC, owner of a DoubleTree Hotel in North Carolina; and after a storm hit, the hotel company ended up tearing down part of the damaged building and undertook millions in renovations, thinking it was covered for the work.
But Liberty Mutual’s excess and surplus lines unit, Ironshore Specialty Insurance Co., won a reprieve and is off the hook for a $26 million judgment against it, thanks to a favorable Georgia Court of Appeals decision handed down last week.
Sublimit Left Out of Policy, But Liberty Mutual Firm Avoids Huge Payout Anyway
