Aon dismissed in dispute over property policy sublimit

A federal district court in New York on Wednesday ruled in favor of an Aon PLC unit in a dispute over a policy that provided only $15 million sublimit in connection with a 2017 tornado that caused $60 million to $100 million in damage.

The complex litigation in Pilkington North America Inc. v. Mitsui Sumitomo Insurance Co. of America Inc. et al. involved a 2017 tornado that struck an Ottawa, Illinois, glass manufacturing company operated by Toledo, Ohio-based Pilkington North America Inc., a unit of Tokyo-based Nippon Sheet Glass Co. Inc.

As part of the litigation involving Pilkington’s efforts to address its loss, Tokyo-based Mitsui Insurance Co. of America, part of the Tokyo-based Mitsui Sumitomo Insurance Group, filed a third-party complaint against Aon units in the United Kingdom and the U.S., Nippon Sheet Glass and MSI’s Japanese parent, charging negligent misrepresentation.

In the complaint, MSI seeks a declaration its coverage is subject to the $15 million limit in the master insurance policy between Nippon Sheet Glass and MSI’s Japanese parent.

The court agreed to dismiss the complaint. “In sum, MSI’s negligent misrepresentation claims are fundamentally and fatally undermined by MSI’s own allegations regarding NSG’s authority to arrange Pilkington’s insurance, the long-standing terms of the Global Program, and MSI’s irreconcilable theory of the wrongdoing perpetrated against it,” the ruling said.

An MSI attorney had no comment, while Aon and NSG’s attorneys did not respond to a request for comment.