LL Battling Some of Its Product Liability Insurers Over Representation

Toano, VA, May 12, 2015—Many of the Lumber Liquidator’s product liability insurance carriers are refusing to defend the company in class-action suits brought by unhappy customers, the New York Post reports.

In response, the company has filed suit against the insurers, court papers filed in a Wisconsin state court reveal. In an April 27 action, the company sued Wausau Business Insurance, Liberty Mutual and other insurance companies for breach of contract.

Lumber Liquidators told The Post that the insurers “are arguing that some of the fine print in those policies lets them off the hook.”

The retailer is asking the court to declare that the insurers are “obligated to defend” the company and required to pay any judgments or settlements, according to court filings. It claims the insurers have promised to pay damages due to “bodily injury” or “property damage.”

Liberty Mutual is asking Lumber Liquidators to pay a retrospective premium of more than $2,000 per claimant as compensation for sending denial letters to plaintiffs suing the retailer in the class-action suits, according to court documents.

Liberty Mutual had already sued Lumber Liquidators in a Virginia federal court, claiming it has no duty to defend the company due to a “total pollution exclusion” clause in all the policies.

Lumber Liquidators, in a recent regulatory filing, said it maintains “insurance against some forms of product liability claims, but such coverage may not be available or adequate for the liabilities actually incurred.”

The retailer’s shares are down 58% this year and closed Monday at $28.06.