Hiscox Ordered to Pay $2.3M Claim Over Florida Business

Hiscox Insurance Co. Ltd. has been ordered to pay a $2.3 million claim following a two-year legal battle over a Florida business that was destroyed by fire, according to federal court records.

The insurer sued sporting goods retailer Matrix Group Ltd Inc., and its president, Louis Orloff, in 2009 claiming they should be exempt from indemnifying the company's $2.7 million claim, records say. Hiscox claimed their investigation found Orloff intentionally set the fire, violating the terms of Matrix's policy. The company said Matrix's central alarm system was not working at the time of the July 5, 2009 fire, and Orloff had motive and opportunity to set the fire. Records did not elaborate further on the fire's cause.

Matrix and Orloff countersued for the money and called Hiscox's investigation "incomplete and wholly inadequate." Lawyers for Orloff and Matrix wrote in court documents that Orloff fully cooperated with the Hiscox investigation into the fire.

A federal jury, following a 13-day trial that began in September, found the fire was not intentionally set and that Orloff did not commit fraud in submitting the claims. The jury ordered Hiscox to pay out the $2.7 million claim, but a judge Jan. 12 lowered that amount following post-trial motions because Hiscox already covered Matrix's $440,000 mortgage. The rest of the claim was to cover business, building and property loss, records said.

Matthew Litsky, the lawyer handling the case for Hiscox, said in an e-mail they intend to appeal the judgment. The company declined to comment further.

Attempts to get comment from lawyers for Matrix or Orloff were not immediately successful.

Hiscox Insurance Co. currently has a Best's Financial Strength Rating of A (Excellent).

(By Michael Buck, senior associate editor, BestWeek: Michael.Buck@ambest.com)