Mansell, Engel & Cole

Major global insurer targeted in insurance denial litigation

Many of our readers obviously remember with great clarity the vivid imagery linked with the massive Kilauea volcanic eruption on Hawaii’s Big Island a couple months back.

Now, in the wake of that, there is a further explosion, which has nothing to do with seismic activity. Rather, it relates directly to litigation which has ensued following Kilauea’s upheaval.

What is at the center of that uproar is mass ire and indignation expressed by policyholders of Lloyd’s of London, one of the largest and wealthiest insurance companies in the world. Affected individuals and families have homeowners policies with Lloyd’s, and they have been pursuing claims related to their homes, which were heavily damaged or destroyed by Kilauea’s wrath.

Reportedly, they have been flatly unsuccessful, with every claim – and there are dozens -- being rejected in its entirety by Lloyd’s.

The above-cited litigation against Lloyd’s is in the form of a lawsuit filed in a Hawaii court just last week. It alleges both bad-faith and negligent conduct against Lloyd’s, which the filing states lacks a license authorizing it to issue insurance policies in the state. The legal team for one elderly couple who lost their home states that its having done so comprises a deceptive business practice.

And that has been coupled with what plaintiffs’ legal counsel terms the insurer’s impermissible and utter failure “to honor commitments and assist homeowners” after reaping large profits via premium collections.

Lloyd’s has reportedly refused to honor affected policyholders’ certificates of insurance, using that denial as a basis for withholding payments on any claims.

The insurer “will be held accountable” for that, says one of the Hawaiian attorneys. Given that the case could ultimately hinge on a local jury’s verdict, Lloyd’s officials might be less than enthused with their prospects.

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