N.J. Utility Sues 11 Insurers Over Sandy Coverage

Public Service Enterprise Group, the largest provider of gas and electric service in New Jersey, sued 11 insurers, including American International Group Inc., over losses from Hurricane Sandy.

PSE&G, which provides electricity to 2.2 million customers in New Jersey, claimed storm damage to its facilities of $426 million while the insurers say their liability for flood losses in designated zones is $50 million, according to the complaint filed June 18 in state Superior Court in Newark.

“The losses caused by Superstorm Sandy’s ensuing storm surge were caused by named windstorm and are not subject to any flood sublimits under such policies,” according to the complaint. The defendants include AIG’s National Union Fire Insurance Co. of Pittsburgh; Allianz Global Risks U.S. Insurance Co., a unit of Allianz SE; Liberty Mutual Holding; Ace Ltd.’s Ace American Insurance; and Swiss Re.

“We are committed to promptly and fairly resolving Sandy related claims,” Cora Lee Klena, a Swiss Re spokeswoman, said in an e-mailed statement. “We take all insurance matters very seriously, and we treat all insurance contracts as confidential agreements with each of our clients. We cannot disclose or discuss the contractual elements of this matter.” Spokesmen for AIG, Liberty Mutual, Allianz and Ace declined to comment on the suit.

PSE&G had $250 million in primary coverage and $750 million in excess coverage, according to the complaint. In its complaint, PSE&G said that only the National Union policy limits the liability to flood damage. The case is Public Service Enterprise Group v. Ace American Insurance, Superior Court of N.J.