D.C. Metro Sues Insurer Lexington for $13M Over Lost Revenue

September 30, 2011

Washington Metropolitan Area Transit Authority has recently filed a lawsuit against its insurer Lexington Insurance Co. of Boston charging that that the insurer failed to indemnify for the revenue losses in the train system’s ridership following the 2009 crash that killed eight passengers.

Metro is seeking to recoup some $13 million from Lexington Insurance. The complaint was filed last week in U.S. District Court for the Eastern District of Virginia, the court clerk’s office told Insurance Journal. The news of the lawsuit was first reported by The Washington Examiner, a local daily in the Washington, D.C. metro area.

According to the court document, Metro has suffered falling ridership and consequential loss of revenue because of the June 2009 crash that killed a train operator and eight passengers and injured scores more. Metro estimates some 6 million rides were lost following the accident. (Fares range from $1.95 to $5.)

The train system is still not restored to normal operations as a result of the accident, according to the complaint.

Metro had paid $1.86 million in premium for up to $50 million of coverage per incident, including losses resulting from partial, complete or potential suspension of business, according to The Washington Examiner. So far Lexington has paid out $1.21 million in claims related to the crash, it said.

Lexington Insurance and its parent company, AIG-owned insurer Chartis, declined Insurance Journal‘s request to comment on the lawsuit.

Lexington Insurance is a U.S.-based surplus lines insurer. It operates through several divisions: property, casualty, programs, healthcare, personal lines; and specializes in a number of industry practices: real estate, higher education, transportation, and public entity.

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