Blackwater says insurer failed to pay for chemical clean-up

By Michelle Massey | May 12, 2010



Blackwater New Orleans filed suit against American International Specialty Lines Insurance Co., now known as Chartis Specialty Insurance Co. over its alleged failure to pay for chemical clean-up costs related to a February 2009 incident.

According to the complaint filed May 7 in federal court in New Orleans, after a Blackwater employee discovered sulfuric acid leaking from an above-ground storage tank, the company began mitigation efforts by transferring the remaining sulfuric acid into a second storage tank. However, a second storage tank also began to leak causing Blackwater to transfer the remaining sulfuric acid to a third-party barge.

In the suit, Blackwater claims it timely informed its insurance company of the leak and submitted a claim. The insurance company responded to the claim stating that it reserved the right to deny coverage for several invoices because those invoices did not involve costs associated with clean-up costs arising out of a "pollution condition" and because they did not "involve remediation of soil, surfacewater, groundwater or other contamination."

According to Blackwater, it bought a pollution legal liability select policy from Chartis, which stated that Chartis will pay, on behalf of Blackwater, clean-up costs from pollution conditions.

Blackwater states that the insurance company has breached the contract by denying coverage for a significant amount of expenses incurred in connection with its clean-up costs.

The plaintiff is requesting the court to require Chartis to provide insurance coverage to Blackwater and compel the insurance company to pay any and all costs required to be paid under the policy, plus reasonable attorneys' fees, court costs, and interest.

According to its website, Blackwater New Orleans is an independent developer and operator of agricultural, petroleum, and chemical liquid terminal storage facilities.

Attorneys Charles A. Snyder, James K. Irvin and J. Timothy Betbeze of Milling Benson Woodward in New Orleans and attorney Lee H. Shidlofsky of Visser Shidlofsky of Austin, Texas are representing Blackwater.

U.S. District Judge Lance M. Africk is assigned to the litigation.

Case No. 2:10cv01426

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