Washington transit agency sues Lexington Insurance for business interruption losses in fatal crash
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ALEXANDRIA, Va.—The Washington Metropolitan Area Transit Authority has sued Lexington Insurance Co. seeking more than $13 million for breach of contract and failure to pay damages related to a 2009 train crash.
The transit agency said the suit is about “Lexington turning its back on WMATA” by breaching its insurance contract and failing to pay millions of dollars in losses from the June 22, 2009, train-on-train crash that killed nine people and injured dozens.
WMATA purchased an all-risks commercial property policy from Boston-based Lexington with time-element coverage, among other types of coverage, for a $1.86 million premium in 2008. The policy provided $50 million of coverage per occurrence, according to court documents.
The accident, investigations, repairs and other work related to the crash caused a systemwide disruption of the second-busiest rapid transit system in the United States, according to the suit.
“Lexington does not dispute that WMATA has suffered business interruption loss and other covered losses arising from the June 22 accident,” WMATA said in the suit, which was filed last week in federal court in Alexandria, Va.
“Yet in breach of the policy, Lexington has failed to pay millions of dollars of covered losses, including business interruption loss(es), that WMATA suffered as a result of the accident,” according to the suit.
To date, Lexington has paid a “partial payment of approximately $1.2 million” for business interruption losses, according to the suit.
Lexington, a specialty insurance unit of American International Group Inc., declined to comment on the suit.
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