N.O.'s Dock Board pledges to fight insurer for Katrina claims

New Orleans CityBusiness, Jul 26, 2007 by Jaime Guillet

The Dock Board today decided to drop its case against an insurance company that settled but vowed to continue legal action against another insurer the board says owes between $80 million to $100 million.

The Dock Board - the board of commissioners for the Port of New Orleans - amended a federal lawsuit that had been filed against two insurers, Boston-based Lexington Insurance Co., and Johnston, R.I.- based FM Global, dropping Lexington from the lawsuit.

The port is seeking insurance payments for Hurricane Katrina- related damages.

Lexington was dropped from the lawsuit because it settled a $20- million claim with the board - the policy's maximum amount.

"The good news is Lexington did settle with us and we're very happy they did," said Danny Hughes, board vice chairman.

But, the board said, nearly $70 million from the Federal Emergency Management for port post-hurricane recovery cannot be accessed until all insurance claims are settled.

Gerald Gussoni, the port's legal services director, said FM Global has been extremely slow to resolve the port's claims on a $65- million wind policy and an $80-million flood policy. FM Global so far has paid nearly $15 million, "chump change" compared to the port's needs, Hughes said.

"It's been an attempt to keep us quiet. Well, it's not," he said.

The board plans to take FM Global to court to expedite the claim, although it might not speed things up, said Gussoni, who figures it'll take a year just for the discovery process.

Gussoni has an Aug. 7 meeting planned with U.S. Federal District Court Judge Stanwood Duval. Gussoni said the meeting will help better establish a timeline for the lawsuit. The board will request a jury trial for the case.