Jackson Co. Port Authority plans lawsuit against former insurer

Published 11:00 pm Monday, July 3, 2006

The Jackson County Port Authority plans to sue its former insurance carrier.

Port commissioners have authorized attorney John Hunter to sue Arch Specialty Insurance to try to settle unresolved claims of about $5 million in storm damage to the port.

Hunter expects to file the lawsuit within the coming two weeks in Jackson County Circuit Court. The lawsuit represents one side of a legal argument.

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Commissioners also canceled their policy with the insurance company and approved hiring Lloyd’s of London as the port’s new insurer.

“What we have here is a three-layer coverage situation,” Port Director Mark McAndrews said. “We have a primary insurer, Arch, and excess coverage from two other companies, Essex and Lloyd’s.”

Hunter said the dispute centers on damage assessments made by an adjuster from Arch and an independent adjuster.

One issue involves the port’s loss of business because of Hurricane Katrina.

McAndrews said Arch paid some money toward resolving claims, but he said company officials refused to join port officials in reviewing other claims and the difference in assessments from Arch and port adjusters.

McAndrews said the delay is preventing the port from receiving money from the Federal Emergency Management Agency, which isn’t presented until after insurance companies make settlements.

A spokeswoman for Arch declined to comment.