Pilkington North America Inc. (Pilkington) recently went to court claiming its insurer, Mitsui Sumitomo Insurance Company of America (MSI), failed to inform the glass company about a change to its policy in a timely manner. In addition to the company’s claims against MSI, Pilkington also claimed its broker, Aon Risk Services Central (Aon), failed to notice the change in its insurance policy.
Pilkington asserts MSI failed to inform the company of a change in its total amount of coverage. MSI’s revised 2016 policy included a cap for Pilkington’s recovery at $15 million, according to the company’s complaint. “…with respect to the policy revisions proposed by MSI, which, if permitted to stand, reduce Pilkington’s available coverage for damage caused by the tornado by approximately $298 million,” stated in court documents.
MSI insured or covered the company for $15 million of the original claim. It denied the remaining amount sought after because the remainder exceeded its policy limit for damage caused by windstorms. The policy defined a windstorm as “the direct action of wind, or the direct action of hail,” meanwhile it defined a storm as “weather or atmospheric condition that has been declared as a hurricane, typhoon, tropical storm or cyclone by the U.S. National Weather service…,”.
The glass company markets and manufactures glass and glazing products for both automotive and architectural markets. MSI is a property and casualty insurance company, while Aon is a New York brokerage insurance business.
Pilkington maintains it has always paid the annual premium on its insurance on time to keep the policy active. “The policy provides insurance for direct physical loss of, or direct physical damage to, first-party property and directly resulting effect on income and expense,” according to the court documents.
Last week Pilkington presented evidence to support its claims and is seeking compensation in New York federal court of $60 million to $100 million. The company believes the millions it’s asking for is warranted following the extent of damage and business interruption to its Ottawa, Ill., factory. According to court documents, the tornado happened on or around February 28, 2017. At that time the glass company was covered by its insurance provider for potential damage from storms. Its policy limit was $319,382,700, per occurrence excess of its deductible.
MSI claims the tornado that caused damage to the glass plant did not meet its policy criteria. “The tornado that destroyed the Ottawa Factory was not caused by a weather or atmospheric condition that had been declared as a hurricane, typhoon, tropical storm or cyclone by any of the weather organizations named in the policy’s definition… The tornado that destroyed the Ottawa factory therefore was not a windstorm caused by named storm within the meaning of the policy,” according to court documents.
Pilkington maintains MSI sent an email to Aon that involved changes that were to be made to the company’s policy from 2015 to 2016. The company claims that email did not define what the specific changes would be, but assured Aon the changes wouldn’t affect the company too much aside from the overall limit increasing.