Raizner Slania LLP has filed an insurance lawsuit on behalf of the owner of a Harris County commercial property against Certain Underwriters at Lloyd’s, London (Lloyd’s) and their adjuster (collectively, the “Defendants”). The lawsuit was necessary due to the unreasonable denial of the plaintiff’s commercial property windstorm damage claim.

Severe Wind and Hailstorm Causes Significant Damage to Houston Commercial Property

On June 29, 2019, a severe wind and hailstorm struck the plaintiff’s property causing substantial damage. Sizeable portions of the roof and the HVAC system were severely compromised. Upon discovering the damage, the plaintiff filed an insurance claim with Lloyd’s.

The insurance carrier, Lloyd’s, assigned third-party administrator, Mills Mehr & Associates (MMA), to the claim. MMA then assigned a field adjuster from The Littleton Group to adjust the claim. Before the damages were assessed, MMA concluded that coverage was not afforded for the subject claim. MMA then issued a denial letter on August 4, 2020. To this day, Lloyd’s has refused to pay for covered damages under its commercial property insurance policy. 

Plaintiff Issues Demand Letter

On June 1, 2017, Governor Abbott signed House Bill 1774 into law as Section 542A of the Texas Insurance Code. Section 542A.003 requires detailed, comprehensive pre-suit notice that is intended to make the claims and litigation processes more transparent and potentially even avoid unnecessary lawsuits. Upon receiving notice, an insurer has the right to conduct an inspection and even make an offer to avoid litigation. When utilized properly, Section 542A should assist business consumers like the plaintiff in avoiding protracted litigation over a clear claim. 

In compliance with Section 542A.003, the plaintiff gave its pre-suit notice to Lloyd’s on April 5, 2021. The pre-suit notice provided a comprehensive outline of the plaintiff’s claim and damages, quantified its loss, and even offered to waive a formal claim for attorneys’ fees if the contractual amounts were paid promptly. Lloyd’s did not respond to the demand letter. 

The Carrier Acted in Bad Faith

Our client cites numerous violations of the Texas Insurance Code, including:

  • Failure to attempt to effectuate a prompt, fair, and equitable settlement of a claim with respect to which liability has become reasonably clear
  • Failure to adopt and implement reasonable standards for prompt investigation of claims arising under its policies
  • Failure to provide promptly a reasonable explanation, in relation to the facts or applicable law, for the denial of a claim
  • Refusal to pay the claims without conducting a reasonable investigation with respect to the claims 
  • Misrepresentation of the insurance policies under which it affords property coverage to plaintiff by making an untrue statement of material facts 
  • Misrepresentation of the insurance policies under which it affords property coverage to plaintiff by failing to state a material fact that is necessary to make other statements made not misleading
  • Misrepresentation of the insurance policies under which it affords property coverage to plaintiff by making a statement in such manner as to mislead a reasonably prudent person to a false conclusion of material facts and failing to disclose a matter required by law to be disclosed 
  • Knowingly committing the foregoing acts, with actual knowledge of the falsity, unfairness, or deception of the foregoing acts and practices
  • Failure to acknowledge receipt of the claim
  • Failure to timely commence investigation of the claim or to request from plaintiff any additional items, statements or forms that the defendants reasonably believe to be required from plaintiff 
  • Failure to notify plaintiff in writing of the acceptance or rejection of the claim not later than the 15th business day after receipt of all items, statements and forms required by the defendants 
  • Delayed payment of plaintiff’s claim

The plaintiff additionally alleged Lloyd’s breached its contract, breached its duty of good faith and fair dealing, acted fraudulently and with malice, and violated the Texas Deceptive Trade Practices Act (DTPA).

Texas Commercial Insurance Coverage Attorneys

If you are a commercial property owner and your insurance claim has been wrongfully denied or grossly underpaid, the Texas insurance coverage lawyers at Raizner Slania can help you get back on your feet. Contact us today for a free consultation to review your case.

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