Insurance company says hotel's policy excludes damages from pollution
The hotel groups alleged the insurance providers wrongfully denied their claim for damages sustained from the chemical leak. The insurance companies, however, said the policy excluded damages sustained from pollution.
About two weeks ago, the insurance companies moved the case, which was originally filed in
The hotels said the contaminated water physically damaged property, "including exposing their water and water-related facilities to poisonous and toxic chemicals, including their water storage facilities, fixtures, pipes, toilets, drains, sinks, pools, and all other places where water flowed into and was stored."
The lawsuit said the hotels suffered "significant and direct physical damage," leading to substantial cleanup costs, lost business and interrupted business from closures and reduced occupancies.
In the lawsuit, the hotels contend these damages are covered under their insurance policy and the companies wrongfully denied their claim.
In a response filed last week, the insurance companies said the hotels' asserted damages are not covered and the lawsuit is barred under the statute of limitations.
They also denied the chemical spill resulted in direct physical damage to their property.
The response cited an exclusion, which said the company wouldn't pay for loss or damages from the "failure or fluctuation of power, communication, water or other utility service supplied to the described premises, however caused, if the cause of the failure or fluctuation: (1) originates away from the described premises."
The exclusion applies whether the loss results in widespread damage or affects a substantial area, the response said.
The response also said Bell should not have been brought in as a defendant in the lawsuit.
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