A lawsuit has been filed in Louisiana against 14 insurers that seeks indemnification for losses and breach of contract arising from claims for the development and sale of homes allegedly containing defective Chinese manufactured drywall.

According to a release from the law firm Anderson Kill & Olick, P.C., the suit was filed by the WCI Chinese Drywall Trust, which was formed in July 2009 after the bankruptcy of homebuilder WCI Communities and its subsidiaries. The Trust assumed liability for claims alleging harm from Chinese drywall installed in homes built by WCI. It is the first insurance coverage action regarding Chinese drywall to be filed in the Chinese wall board multi-district litigation in the Eastern District of Louisiana.

WCI, its subsidiaries, and subcontractors claims to have purchased insurance policies with aggregate limits of more than $200 million during the policy periods triggered by Chinese drywall claims, which began in 2006. Lawyers for WCI said that insurance companies and subcontractor insurance companies have either denied coverage, reserved their rights, failed to reply to WCI's notice letters, or otherwise failed to acknowledge coverage. More than 700 homeowners may seek recovery through the Trust

WCI is seeking a declaratory judgment finding coverage for the claims, as well as damages for breach of contract.

"A prompt and thorough insurance recovery is vital to enabling homeowners suffering from the effects of defective wallboard to remediate their homes and recover their losses," said Robert M. Horkovich, lead counsel to the Trustee for the WCI Chinese Drywall Trust. Horkovich is from the law firm of Anderson Kill & Olick, P.C.

The 14 insurance companies named in the lawsuit include:

American International Specialty Lines Insurance Company
American Guarantee and Liability Insurance Company
Amerisure Insurance Company/Amerisure Mutual Insurance Company
Auto-Owners Insurance Company
FCCI Insurance Company/FCCI Commercial Insurance Company
Hermitage Insurance Company
Illinois Union Insurance Company
Landmark American Insurance Company
Lexington Insurance Company
Mid-Continent Casualty Company
National Union Fire Insurance Company of Pittsburgh, Pa.
Old Republic Insurance Company
Scottsdale Insurance Company
Steadfast Insurance Company

Special Reports /

Lawsuit Filed Against 14 Insurers for Chinese Drywall

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