Navigating Business Insurance Coverage in the Aftermath of Texas Power Crisis and Winter Storm

(L-R) Leslie C. Thorne, accomplice, and Wes Dutton, affiliate, at Haynes and Boone. Courtesy picture

As Texas thaws within the wake of winter storm Uri’s polar winds, insurers all through the state are steeling themselves for an avalanche of claims from throughout the spectrum of insurable losses.  In accordance with some estimates, the storm prompted upwards of $90 billion {dollars} in losses in Texas—of which $18-20 billion are possible insured. Not solely are many households and companies making claims for property harm prompted immediately by the deep freeze—burst pipes, spoiled produce, collapsed roofs, broken gear, misplaced livestock, auto collisions, enterprise interruption, and so forth.—however a latest flurry of storm-related lawsuits and authorities investigations signifies that some business insureds might have substantial third-party claims underneath their legal responsibility insurance policies.

For instance, Texas Lawyer Basic Ken Paxton filed a lawsuit in opposition to Griddy on March 1, alleging that the electrical retailer engaged in misleading enterprise practices by charging prospects tens of hundreds of {dollars} throughout peak demand. The lawsuit echoes already-launched legal professional common investigations into numerous market individuals, calls by Texas Gov. Greg Abbott for the board of the Electrical Reliability Council of Texas (“ERCOT”) to resign, and Texas Lieutenant Gov. Dan Patrick’s calls for for substitute of the management at ERCOT and the Public Utility Fee (“PUC”). On the federal degree, the Federal Power Regulatory Fee and the North American Electrical Reliability Co. introduced a “joint inquiry into the operations of the bulk-power system in the course of the excessive winter climate situations at present being skilled by the Midwest and South central states.” The Commodity Futures Buying and selling Fee has additionally indicated curiosity in probing the vitality worth spikes which occurred within the midst of the storm. Moreover, the environmental subcommittee for the U.S. Home Committee on Oversight and Reform requested data on the facility outage from ERCOT and expressed an curiosity in probing the vitality supplier’s preparedness for future incidents of utmost climate. The Home Oversight committee’s requests are simply one in all 4 at present pending congressional investigations, together with parallel inquiries by the Home committees on Power and Commerce, and Science, in addition to the Senate Committee on Power.