Fairwinds Estate Winery takes insurance company to court claiming misleading policy, refusal to pay

Fairwinds Estate Winery says one of its insurers sold it a useless insurance policy shortly before the winery was destroyed by the 2020 Glass Fire.

The Calistoga winery is suing Kinsale Insurance Company, which denied a $2 million claim following the blaze, in Napa County Superior Court.

At the time of the fire, which broke out Sept. 27 and consumed the winery shortly thereafter, Fairwinds was covered by two policies - an $8.2 million main policy with Beazley Insurance Services and the secondary one with Kinsale for $2 million, intended to cover any damage beyond the main Beazley policy.

When the Glass Fire destroyed Fairwinds' main building and tasting room, Fairwinds expected this excess policy to kick in, since it believed that property losses were higher than the combined coverage - let alone the primary, policy from Beazley, according to the lawsuit.

But now, Kinsale refuses to pay out, saying that Beazley's coverage was more than enough.

Kinsale assessed the value of Fairwinds's main building and tasting room to $4,505,893, which is less than the amount that was covered by Beazley following the fire, according to court documents. Thus, since Beazley already covered that amount, Kinsale says they do not owe Fairwinds anything.

"Under Kinsale's interpretation, Fairwinds could never suffer loss sufficient to trigger coverage under the Excess Policy," Fairwinds said in its lawsuit.

According to the suit, Kinsale's total valuation of the main building, tank building, tasting room, business personal property and outside equipment amounts to $6,542,831. Yet the company had agreed to sell Fairwinds an additional $2 million policy anyway.

"Thus, even if Fairwinds lost every single piece of property in a wildfire, because the underlying policy's coverage limit is greater than that amount at $8,310,000, coverage under the excess policy would not be triggered," reads the complaint.

Attorneys for Fairwinds and Kinsale did not respond to requests for comment.

No trial date has been set for the lawsuit. A status conference is set for February.