A casino operator is suing three insurers that said policy language excluded their paying flood damage and rejected $346.5 million in claims from the business after Hurricane Katrina hit its Biloxi, Miss., location.

Pinnacle Entertainment filed suit in U.S. District Court in Las Vegas against Allianz Global Risks U.S. Insurance Company, Arch Specialty Insurance Company, and RSUI Indemnity Company, on Aug. 1, for failure to pay its claims.

According to Pinnacle, the companies provided $300 million of coverage in excess of $100 million provided by other insurers. In its court filing, Pinnacle said it has received $50 million from primary carriers and has received promises of $50 million from the remaining primary carriers.

Pinnacle said the three insurers have reneged on their agreement by claiming the policies do not cover damage from flooding. The suit also alleges there is no continued coverage for business interruption after Pinnacle announced the sale of the property to Harrah's Entertainment Inc.

The sale has not closed, and is not expected to close until later this year. Pinnacle said the insurers also informed the Las Vegas-based company it could not designate a project it has under way in St. Louis County, Mo., as a replacement for the Biloxi property.

In its court filing, Pinnacle said it took out a "Weather Catastrophe Occurrence" policy that specifically covers flood damage occurring from a "storm or weather disturbance" named by the National Weather Service, in this case Hurricane Katrina. The policy also gives the company the right to name a replacement property as long as it is in the same country.

Pinnacle contends that the three insurers waited close to a year before informing the company of its objections, creating an undue burden upon it. In addition to its claim, Pinnacle is seeking payment for punitive damages, attorney's fees and costs, and interest.

In a statement, Arch said it "is committed to paying all appropriate and properly documented and submitted claims, although we cannot comment with respect to any particular loss or claim.

"We are disappointed that Pinnacle has chosen to file suit but certainly respect its right to do so. Arch endeavors to resolve all open issues in a timely, fair and reasonable manner, subject to the terms and conditions of the insurance contract. Further, Arch remains willing to expedite resolution of our differences directly or through alternative dispute resolution."

A spokeswoman for RSUI said the company does not comment on ongoing litigation.

A representative from Allianz was not available for comment.

This article originally appeared in The National Underwriter P&C. For the complete article, please click here.

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