The Alley Theater of Houston is suing its insurer, Gulf Group Lloyds Insurance Co., for reportedly failing to reimburse $6.5 million in damage caused by Tropical Storm Allison last year. According to the Houston Chronicle, the Alley claims to have had an all-risk commercial property policy which provides up to $7.5 million for loss or damages, $1.5 million for personal property damage, and $2 million for loss of business income. The policy was in force from Aug. 31, 2000 to Aug. 31, 2001; the storm struck Houston in June 2001. The Alley’s lawsuit claims floodwater entered the theatre through an underground tunnel connecting it to a parking garage operated by a separate entity. The theater’s first two floors were submerged. The stage, rehearsal hall, and electric and temperature control systems were completely destroyed. Cleanup efforts started within hours, but performances had to be either cancelled or moved to other venues. Gulf Group denied coverage Aug. 20, stating that the Alley’s policy excluded the water and weather conditions that caused the damage. The company did make partial payments on losses under inland marine coverage, however. The Alley’s lawsuit contends that all damages incurred were covered under its policy, and that Gulf Group breached its contract.
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