Name: Raizner Slania LLP
Address: 2402 Dunlavy St Suite 300, Houston, TX, 77006, US
Telephone: 844-554-9099
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Special purpose buildings hold an important and unique place in day-to-day life for many. These facilities include stadiums for sporting events, concert halls and live music venues, convention centers, and banquet halls, among others. These spaces provide a space for some of the most memorable events in a person’s life, making it especially upsetting for the owners of these special purpose buildings when they have to temporarily shut down due to unforeseen property damage. However, these already frustrating instances are only made worse if an insurance company chooses not to honor a valid claim. These egregious actions could make it necessary for the owners of these commercial spaces to file an insurance coverage lawsuit.

When a hail storm, fire, natural disaster, or severe weather event damages a special purpose building of any kind it can leave a devastating impact. Not only can the extent of the damage cause millions of dollars in losses for the business owners, but the insurance policies written to address the damage can also be incredibly complex for policyholders to understand. These and other similar situations can quickly lead to insurers denying, delaying, or underpaying claims that should be honored under the legally binding terms of an insurance policy. This ultimately leaves owners with incredibly expensive and extensive repairs to be made, but the disruption in business for events that have likely been planned and booked well in advance can be financially and reputationally devastating.

At Raizner Slania, our skilled commercial property damage claims attorneys have handled numerous instances of litigation against some of the largest insurance companies in the world for bad faith actions to the detriment of their policyholders. The extended shutdown of these venues and event centers due to damage that is out of the control of the insured means much more than just canceling and rescheduling an event. Even after a disaster, customers and vendors may expect the venue to be fully operational by a specific time. Any extended closure or shutdown of these facilities can be detrimental to business and harm relations with important vendors and clients.

Some of the notable lawsuits our law firm has filed on behalf of special purpose building owners include the following cases:

Hurricane Harvey Bad Faith Insurance Lawsuit Against Valley Forge Insurance Company, et al.
Wind and Hail Damage Lawsuit Against Ohio Security Insurance Company
Hurricane Harvey Lawsuit Against Sentinel Insurance Company, LTD
Hurricane Harvey Lawsuit Against Underwriters at Lloyd’s of London, et al.
Hurricane Harvey Lawsuit Against Certain Underwriters at Lloyd’s
COVID-19 Event Cancellation Lawsuit Against Certain Underwriters at Lloyd’s, London

Hurricane Harvey Bad Faith Insurance Lawsuit Against Valley Forge Insurance Company, CAN Insurance, and Engle Martin & Associates

The property consisted of 51,114 square feet of finished space, at three stories high, and had a porte-cochere at the main entrance. On August 25, 2017, Hurricane Harvey came ashore along the Texas coast and caused devastating damage throughout the state. As a result of Hurricane Harvey’s wind, the Harris, County hospital property suffered significant damage. Sizable portions of the roofs and exterior were compromised by wind. As a result, Hurricane Harvey’s rainfall was able to enter the building and cause damage to the interior.

Immediately upon discovering the damage, the plaintiff filed an insurance claim with the insurance carriers and asked that the cost of repairs be covered pursuant to its policy. In response to the claim, Valley Forge assigned internal adjusters with CNA to the claim. CAN then, in turn, engaged representatives to handle the claim who were improperly trained as to their responsibilities, and who were directed to and did minimize claim payments, delaying the reconstruction project. Sixteen months after Hurricane Harvey severely damaged the property, based on inadequate investigations, wrongful delays, and refusals to fully pay for reasonably clear damages, Valley Forge has not issued payment. Valley Forge has unreasonably blamed the loss on “pre-existing opening/deficiencies” and has denied Hurricane Harvey played any role in the property damage. Valley Forge did this in an effort to avoid its contractual responsibilities and to save significant sums of money.

Wind and Hail Damage Lawsuit Against Ohio Security Insurance Company

On April 4, 2014, a wind and hail storm swept through Tarrant County and Dallas County and caused severe damage to the roof, HVAC, exterior, and interior of the property. Immediately upon discovering the damage, the plaintiff filed an insurance claim with Ohio Security Insurance and asked that the cost of repairs be covered pursuant to the policy. In response to the claim, Ohio Security Insurance assigned adjusters, consultants, and agents to the plaintiff’s file that were inadequately trained to handle this type of claim. Specifically, the claim was assigned to an adjuster who failed to perform a thorough investigation of the claim. The adjuster performed a substandard inspection of the property and did not prepare any estimates or scopes of damages for the properties and/or failed to provide those items to the plaintiff.

The adjuster failed to hire qualified experts to assess the damage and continually delayed the claims process. Ohio Security Insurance relied solely on the adjuster’s inadequate, incomplete, and unreasonable investigation to determine what amounts, if any, to pay on the claim. As a result, the plaintiff’s claim was grossly underpaid and the plaintiff has been unable to make the necessary repairs to the property. This has caused additional damage to the exterior and interior of the property.

Hurricane Harvey Lawsuit Against Sentinel Insurance Company, LTD

On August 26, 2017, Hurricane Harvey caused significant damage to the plaintiff’s property. Sizable portions of the roof were compromised by wind, which allowed rain to be driven in, causing substantial damage to the interiors of the property. Harvey completely destroyed the roof, interior, ceiling, windows, walls, flooring, and other parts of the physical structure. In addition to structural damage, other valuables such as electronics, furniture, equipment, props, and one-of-a-kind costumes were completely ruined. Immediately after the storm, the plaintiff promptly filed a claim with Sentinel, alerting them to the extensive damages. In an effort to assist Sentinel with the claims process and to mitigate any further damages to the property, the plaintiff engaged a roofing contractor to perform emergency mitigation services and assist with estimating some of the repair costs.

According to the “Inside Claims Rep” from Sentinel, who does not even appear to be located in Texas, the plaintiff’s claim was denied in full on the basis that water entry was not due to a storm created opening, but appeared to be related to heavy rainfall from Hurricane Harvey. It is unclear at this time whether Sentinel or their Inside Claims Rep conducted any testing whatsoever or made any attempt at preparing an estimate reflecting these outlandish findings. If any testing was conducted or estimates were in fact prepared, the documents and/or explanations were not provided to the plaintiff. Instead, Sentinel simply denied the claim and closed the file, a move designed to save Sentinel hundreds of thousands of dollars.

Hurricane Harvey Lawsuit Against Underwriters at Lloyd’s of London, Fair American Select Insurance Company, and Engle Martin & Associates

The plaintiff is a hospital consisting of six different buildings. The main hospital was built on four acres of land and is currently a three-story building with four separate wings. On August 25, 2017, Hurricane Harvey made landfall off the Texas coast as a Category 4 Hurricane. Wind gusts in the vicinity of the property were recorded up to 132 miles per hour. This wind caused sizable portions of the roof to be compromised, which in turn caused interior damage to the buildings during Harvey’s unprecedented rainfall.

Upon discovering the damages, the plaintiff filed an insurance claim with Lloyd’s and Fair American and asked that the cost of repairs be covered pursuant to the policy. In response, Lloyd’s and Fair American assigned the claim to Engle Martin & Associates. The adjusters assigned to the claim by Engle Martin were unqualified and incapable of adequately assessing the damages to this type of commercial property. These adjusters were also the source of many delays throughout the claims process. Fifteen months after the Hurricane Harvey winds severely damaged these properties, based on inadequate investigation, wrongful delays, and refusals to fully pay for reasonably clear damages, the carriers had only issued partial payment. Despite clear evidence of covered replacement costs and mitigation of damages, the carriers failed to issue the full payment owed under the insurance policy covering our client’s property and instead authorized continued delays and underpayments.

Hurricane Harvey Lawsuit Against Certain Underwriters at Lloyd’s

The plaintiff owns a large commercial property in Houston, Texas that houses a banquet hall, office space, and kitchen facilities. On August 25, 2017, Hurricane Harvey, recognized as one of the most devastating natural disasters in United States history, made landfall on the Texas coast as a Category 4 hurricane with wind speeds of up to 150 miles per hour. Harvey’s extreme winds and rain when it hit Harris County, and specifically the subject property, on August 27, 2017 caused the property substantial damages. Sizeable portions of the property’s roof were compromised by wind, resulting in interior damage to ceilings, walls, and flooring.

Despite underwriting insurance policies for Texas properties, Lloyd’s does not have a single employee in Texas. In this case, Lloyd’s assigned our client’s claim to Gulf Coast Claims Services (GCCS), one of several adjusting firms that have sprouted to service the foreign, absentee insurance market led by Lloyd’s. Although Texas law provides that an insurer has a “non-delegable duty” to responsibly handle claims, delegating is precisely what foreign insurance entities like Lloyd’s do on a regular basis. Lloyd’s utilized its preferred vendor, GCCS, to handle adjustment of the claim on its behalf. GCCS’s adjustment was disorganized, rife with delays, and left many of the plaintiff’s questions unanswered. The plaintiff hired its own representative to assist with the claims process, but GCCS’s adjusters continuously ignored the plaintiff’s representative in an effort to intentionally mislead the plaintiff about the claims process and ultimately deny the claim.

COVID-19 Event Cancellation Lawsuit Against Certain Underwriters at Lloyd’s, London

The International Dairy Deli Bakery Association (IDDBA) is a non-profit group that represents the dairy, deli, bakery, cheese, and supermarket food service industries. Each year, the organization’s members gather for three days to showcase and sample each other’s products and services, and to network. Fortunately, IDDBA had the foresight to purchase an event cancellation insurance policy from Underwriters, which covered the 2020 trade show in Indianapolis, the 2021 trade show in Houston, and the 2022 trade show in Atlanta. In particular, the IDDBA’s policy contains a “communicable disease” coverage extension, which provides coverage for an event that is cancelled due to a communicable disease. Like many other organizations, the IDDBA had to cancel its 2020 trade show due to the coronavirus pandemic. But since it had procured coverage under the communicable disease extension, the IDDBA filed an insurance claim, and Underwriters ultimately paid approximately $4.3 million for the claim.

Despite the disappointment of cancelling its flagship event in 2020, the IDDBA remained hopeful that the event would resume in 2021 and the IDDBA began planning for a 2021 trade show in earnest. However, a few months before the 2021 trade show in Houston, the IDDBA Executive Committee made the difficult decision to cancel its planned 2021 trade show, due to safety concerns and company-mandated travel restraints on exhibitors that did not allow the majority of registrants to attend. Despite the circumstances surrounding the claims for the 2020 and 2021 trade shows being very similar, Underwriters issued a carefully crafted reservation of rights letter for the 2021 claim, which is likely to portend a denial of that claim. In response, the IDDBA, after hiring Raizner Slania, filed a suit for declaratory judgment in Harris County District Court, seeking an adjudication that the claim is rightfully covered for 2021.

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Special Purpose Building: Lawsuits Filed

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