Pinnacle Sues Insurers Over Katrina Damage

Casino owner Pinnacle Entertainment Inc. has sued three insurance carriers over Hurricane Katrina damage at its former Casino Magic property in Biloxi, Miss.

Las Vegas-based Pinnacle claimed that the companies improperly blamed losses on flooding instead of a weather catastrophe of the kind specified in their policies. Pinnacle, which claims breach of contract and fraud, seeks $346.5 million in damages.

“Defendants were fully aware that hurricanes cause storm surge and flood,” Pinnacle said in a 13-page lawsuit filed Tuesday in U.S. District Court in Las Vegas. It accuses the insurance carriers of fabricating arguments to limit or eliminate their responsibility to pay.

Two of the companies -- Allianz Global Risks U.S. Insurance Co. in Chicago and Arch Specialty Insurance Co. in New York -- did not immediately respond to calls. Dave Leonard, executive vice president at RSUI Indemnity Co. of Atlanta, declined to comment.