Saving a Small Business with Insurance Advocacy

Using Insurance Know-How to Save a Small Business from the Brink of Bankruptcy


"The best thing that ever happened to our company was Sergio introducing us to you and Greg. You somehow turned our potentially non-existent coverage into full-coverage....PLUS a maximum coverage E&O victory! I have no idea how you threaded the needle like you did, but hats off to you for sure! You saved our company from possible bankruptcy on numerous occasions and made it possible for us to continue existing."

The Background:

The owners of a chemical product manufacturing company suffered a devastating fire that completely destroyed their facilities, caused major damage to neighboring properties and released caustic chemicals into the surrounding areas. The small, family owned company lacked the resources to rebuild on their own. Thus, when the insurance company that issued the Commercial General Liability and Pollution Liability Policy denied all coverage, it appeared the company would be forced to permanently cease operations and declare bankruptcy. With the very existence of their business on the line, the company interviewed several coverage law firms and decided that Newmeyer Dillion had the skills, knowledge and experience necessary to save their business.

Our Analysis:

Coverage partner James Hultz visited the site, learned about the business and began gathering facts regarding the business and the fire incident. He discussed the situation with several employee witnesses and viewed evidence regarding the fire’s origins. The team learned that the company’s insurance broker had neglected to purchase coverage the type and limits of coverage requested by the company. As a result, the company did not have the type of insurance typically expected to cover the type of loss at issue. However, we developed a creative theory of coverage under the facts and unique provisions of the policy at issue.    

Our Outcome:

Full Recovery Under the Pollution and Legal Liability Policy. Newmeyer Dillion marshaled authoritative law addressing analogous policy terms and built a compelling case for coverage under seldom-used provisions of the specialized policy at issue. We presented the information and convinced the insurer to reverse course and provide coverage for all claims and damage caused by the fire. Ultimately, the insurer paid millions of dollars toward rebuilding the factory, defending and paying third-party claims, and reimbursing the company for site cleanup.

Full Recovery Under the Involved Broker’s Professional Liability Policy. Due to the size and number of claims, the company still lacked the ability to rebuild their facilities even after the insurer paid out all of the policy limits. Therefore, led by Mr. Hultz, we developed a virtually irrefutable broker negligence case and submitted the claim to the broker’s professional liability carrier. The carrier quickly paid the limits of its policy to settle the claim. The firm was able to recover millions of dollars of policy benefits without ever stepping foot into court. Through our efforts, the company survived and since has continued to thrive and grow. 

"Thank you so very much for all of your efforts. You took our case personally and you went above and beyond. We will reach out to you with any other coverage related questions and will continue to sing your praises to anyone in need of similar coverage."