Haynes and Boone, LLP Partner Leslie Thorne has talked with multiple publications, including Bloomberg, the Wall Street Journal, Law360, Business Insider and Reuters, about how the winter storm that left millions of Texans without power and water last month is expected to generate the most insurance claims stemming from a single event in state history.
Here is an excerpt from Law360:
Insurance attorneys who spoke to Law360 said they expect to see huge numbers of both residential and business claims that will dwarf what the state usually sees in more regional disasters like hurricanes and hail storms. Coming next will be a period of reviewing and paying out claims, followed by an expected uptick in litigation that will take years to resolve as Texas courts face docket backlogs due to the pandemic.
The massive winter storm caused the state's grid operator, the Electric Reliability Council of Texas (ERCOT), to implement rolling blackouts, known as load shedding, to avoid catastrophic system collapse after a significant portion of generating units were forced offline during the record-setting cold snap that brought below-freezing temperatures statewide. Widespread property damage, forced business closures, individual injuries and deaths followed.
Aside from those insurance claims, expect to see businesses and individuals sue "certain actors in the energy sector" related to the grid problems, according to Leslie Thorne, co-chair of Haynes and Boone, LLP's litigation practice group. On Thursday, ERCOT and Houston power provider CenterPoint Energy Inc. were hit with a $10 million lawsuit over the outages.
"The viability of those is questionable," Thorne said, citing … liability limitations applicable to some companies. "We'll see folks filing suit in state court … and whether those ultimately go forward remains to be seen ... but I think you're going to see a significant number of insurance claims related to those suits under different types of policies."
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Here is an excerpt from Business Insider:
The storm will generate enormous property claims and business interruption claims, both from businesses shut down and unable to operate and from the energy sector itself, said Leslie Thorne, partner at Haynes and Boone LLP in Austin.
“A lot of these plants couldn’t operate to get energy, electricity in the system because they were frozen themselves,” she said. Many of those companies are going to be looking to their insurance, considering they weren’t able to deliver at a critical time, Ms. Thorne said.
The event has the potential to give rise to business litigation that triggers policies beyond commercial property, such as commercial general liability and directors and officers liability claims, she said.
Already several lawsuits have been filed against Austin-based power grid operator the Electric Reliability Council of Texas, or ERCOT, and electricity transmission company CenterPoint Energy by family members of those who died and those who suffered property damage during last week’s storm.
“Those claims are going to face a lot of headwinds in terms of the protection some of these companies have in the regulatory sphere. But they most certainly are going to trigger insurance,” Ms. Thorne said.
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Here is an excerpt from Reuters:
The weather and outages have also disrupted supply lines across the states, leaving many businesses unable to function, said Austin policyholder lawyer Leslie Thorne, who has received 30 calls during the past three days from clients needing advice about coverage.
“It’s dire,” Thorne said. “We’re really hoping a lot of power is coming back on today.”
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