Office Group, Insurers Settle Over Quake Damage
The owners of 10 office buildings in Sherman Oaks, Encino and Los Angeles this month reached an out-of-court $5.7-million settlement with a group of insurance companies over damage from the 1994 Northridge earthquake.
The buildings are owned by pension plans that have the Trust Company of the West acting as their trustee, and before the Northridge temblor they purchased one umbrella insurance policy to cover all 10 buildings.
The group’s primary quake policy was with Aetna, but it contained a $10-million limit for quake liability. If losses exceeded that, additional coverage was to be provided from a blanket policy purchased from five other insurers.
An attorney representing the office owners, Steven A. Fox, said the legal dispute centered on different interpretations of the policy’s deductible. Fox contends the policy clearly said that one deductible, the highest among all 10 buildings, would serve as the group’s deductible, while the insurers argued that each building had to reach its own deductible before any insurance payments were made.
Some of the properties covered by this settlement are the Sumitomo Bank Building and the Sanwa Bank Building in Sherman Oaks.
The settlement involved five carriers: Firemen’s Fund Insurance Co., Navigators Insurance Co., Westchester Surplus Lines Insurance Co., Homestead Insurance Co. and RLI Insurance Co.