Trump Soho files suit over Sandy storm claim

June 07, 2013 02:30PM

The Trump Soho condominium-hotel has filed suit against its insurer, Affiliated FM, for allegedly rejecting its claim for Hurricane Sandy-related issues, and also accused ConEdison of gross negligence, Crain’s reported.

The suit could be the first to test the power utility’s claim that a flood at one of its substations, rather than an explosion, caused the blackout south of Midtown, allowing insurers to dodge liability for Sandy-related claims.

Trump Soho seeks a minimum of $2.3 million in damages.

Bayrock/Sapir Organization LLC, which developed the tower in partnership with the Trump Organization, filed a business interruption claim to Affiliated. The insurer rejected the claim in January on the grounds that the hotel’s insurance did not cover interruptions due to flooding at a ConEdison facility, the lawsuit stated.

Trump Soho, however, claimed that the reason for the blackout was the highly publicized explosion at a ConEdison substation near the East River, which it said would be covered under its insurance policy.

“We didn’t expect to get denied for 100 percent of our claim,” Bayrock/Sapir General Counsel Julius Schwarz told Crain’s. “We had flood insurance.”

“The outages to much of Lower Manhattan during Sandy was due to unprecedented flooding in our facilities and other areas,” a ConEdison spokesperson told Crain’s, adding that they had not yet been served with the suit.

Affiliated did not immediately return Crain’s request for comment. [Crain’s]Zachary Kussin