New Orleans-based Loyola University earlier this month filed suit against CNA Financial Corp. to recover damages from the insurer for Hurricane Katrina losses.
The lawsuit, filed in U.S. District Court for the Eastern District of Louisiana in New Orleans, claims the Chicago-based insurer has paid only $4 million of property damage and business interruption losses totaling $28.5 million.
The named defendant in the suit is Continental Casualty Company, a subsidiary of CNA.
The plaintiffs are seeking other parties insured by CNA who felt their claims were unjustly denied as part of a class.
Loyola hired Ernst & Young for $200,000 for an estimate of the damages, the suit said.
The audit pinpointed property losses of $6 million and business interruption losses of $22.5 million.
In addition to causing extensive damage to the campus, the hurricane also resulted in damage to a vast majority of the residences in the surrounding area that students used for housing.
As a result, the campus was closed for the fall semester last year while access for repairs was denied by municipal authorities for some time after the hurricane on August 29.
The suit terms CNA's behavior "arbitrary and capricious" and seeks penalties and attorney fees.
CNA spokeswoman Katrina Parker said the company does not comment on ongoing litigation.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.