Insurance company says hotel's policy excludes damages from pollution

July 14--An insurance company recently sued by three South Charleston hotels, says a policy issued to the hotels does not cover damages they say they sustained from the Jan. 9, 2014 chemical spill.

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.

Monarch Holdings LLC, Hospitality Ventures Limited Liability Company, which owns The Hampton Inn in Southridge; E&G Inc. and Capitol Hotel Group, which owns the Holiday Inn and Suites in South Charleston; and Allied Hosts LLC, which owns the Wingate Inn in South Charleston sued Travelers Companies Inc, Charter Oak Fire Insurance Company and Bradley Trent Bell, an account executive for Travelers.

About two weeks ago, the insurance companies moved the case, which was originally filed in Kanawha County Circuit Court, over to federal court.

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.

Contact writer Andrea Lannom at [email protected] or 304-348-5148. Follow her at www.twitter.com/AndreaLannom.

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