NYU sues for $1.47 billion over denied Sandy insurance coverage
Hurricane Sandy caused a significant amount of damage to NYU Langone, which suffered damage to many facilities and suffered revenue and grant losses.
November 3, 2015
NYU is suing a Factory Mutual Insurance Company Global unit for $1.47 billion after being denied coverage of losses in 2012 caused by Hurricane Sandy.
Langone Medical Center incurred much of the damage from the storm, particularly in inpatient and outpatient facilities, the research department, the emergency department and intensive care facilities. The medical center also suffered revenue and grant losses.
The university contacted the Federal Emergency Management Agency to cover its losses due to FM Global’s alleged refusal.
The policy agreement between NYU and FM Global ensures “all risk” coverage according to the complaint, which was filed last Wednesday in the U.S. District Court Southern District of New York.
The policy between NYU and FM Global includes a $250 million sublimit and a $40 million sub-sublimit — both specific limitations on the amount of coverage provided in certain aspects of the insurance. However, FM Global intentionally excluded a time element in the sublimit, causing it to apply only to Property Damage, according to the Complaint.
The $40 million flood sub-sublimit only covers damages in specific areas and therefore does not apply to time element.
“To the extent the specific $40 million flood sub-sublimit is even applicable, by its own express terms it does not apply to Smilow, HCC and Skirball because these properties are not located within the addresses listed in the Policy’s $40 million flood sub-sublimit,” the lawsuit states.
Montieth Illingworth, a spokesman for FM Global, said the company is disappointed that NYU decided to sue. He added that FM Global has followed through in every aspect of the agreement between the two parties.
“Notwithstanding our best efforts to resolve our differences, it is regrettable that NYU has resorted to filing this lawsuit,” Illingworth said. “FM Global has at all times honored our obligations under the policy provided to NYU. We promptly paid $40 million to NYU within weeks of the Superstorm Sandy flood. The allegations in this complaint are without merit and we will oppose it vigorously.”
NYU will be represented by Pillsbury Winthrop Shaw Pittman LLP, while FM Global will be represented by Winston and Strawn LLP.
Erik Cummins, senior PR manager at the law firm representing NYU, was unable to comment on the litigation.
Email Greta Chevance at [email protected].
