Xavier U. Joins Other New Orleans Universities in Suing Insurers Over Katrina Coverage

Xavier U. Joins Other New Orleans Universities in Suing Insurers Over Katrina Coverage
By KATHERINE MANGAN
Chronicle for Higher Ed.

Another New Orleans university is suing its insurers for allegedly failing to cover damages incurred in the aftermath of Hurricane Katrina. Xavier University of Louisiana, which suffered an estimated $40-million in property damages, sued the American Bankers Insurance Company of Florida last week, saying that a year after the disaster struck, Xavier was still waiting to be fully reimbursed for its losses.

It is also pursuing a case against the Traveler's Property Casualty Company of America, arguing that the levee breaches that caused several feet of water to pour into the ground floors of Xavier's buildings were the result of human error, not a natural occurrence. Traveler's has argued in court that it is not liable for damages caused by floods because of a flood exclusion in Xavier's policy.

Last week's lawsuit, filed in federal court in New Orleans, described how university officials, including President Norman C. Francis, had proceeded with costly repairs to campus buildings while waiting for insurance reimbursements (The Chronicle, February 10).

"Because of its commitment to the community and its students, Xavier committed to the ambitious plan of repairing its campus such that Xavier could be open for classes on January 17, 2006," the lawsuit states.

The suit adds that American Bankers Insurance has paid some but not all of the university's claims. A spokesman for the insurance company declined to comment on the lawsuit, saying the company's lawyers had not yet reviewed it.

Other New Orleans universities that have sued their insurers include Dillard University, Loyola University New Orleans, and Tulane University (The Chronicle, September 1).

In its lawsuit against Traveler's, Xavier argues that the water that damaged campus buildings resulted from the collapses of the 17th Street Canal and London Avenue Canal levees, and that those breaches were the result of human error in the levees' design and construction, not Mother Nature. As such, the damages should be covered under the university's "all risks" policy, according to Xavier officials.

"We're arguing that because the levee breaks were manmade, Traveler's cannot assert the flood exclusion," said James M. Garner, a lawyer representing Xavier who is expected to make those arguments in court this month.

The lawsuit argues that a flood caused by human design or construction flaws is different from a naturally occurring flood. The United States Army Corps of Engineers has conceded those design and construction flaws, according to the lawsuit.

"Simply put, if a firefighting helicopter had erroneously dumped hundreds of gallons of water on Xavier's buildings, or a tanker truck carrying water had driven into one of those buildings, spilling thousands of gallons of water, coverages would be provided for these damages," the lawsuit states. "In the same manner, Xavier has coverage in this instance as the damage was caused by the Corps, not a natural occurrence."

The lawsuit also states that Traveler's did not pay Xavier a penny until after the lawsuit was filed, in February, and then refused to pay for anything it considered flood-related.

A spokeswoman for Traveler's said the company's privacy rules did not allow her to speak about individual claims.