Insurers must pay $58 million in eight-month power plant unit shutdown

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A New York State Supreme Court judge has ruled in favor of a Canadian energy company and against several insurers in a $58 million dispute over business interruption and property coverage involving a power plant unit that was out of commission for eight months.

On September, 16, 2008, TransCanada Energy USA, a unit of Calgary, Canada-based TransCanada Corp., shut down a unit in its New York Ravenswood electric generating plant because of excessive vibrations, according to the Wednesday ruling in New York in National Union Fire Insurance Co. et al. v. TransCanada Energy USA Inc. and TC Ravenswood Services Corp.

Four days later, a crack in the generator's rotor was discovered and the unit was out of service until May 18, 2009, according to the ruling.

TransCanada had first-party property and combined business interruption coverage from insurers including National Union Fire, a unit of American International Group Inc., covering the period Aug. 26, 2008 to June 1, 2009.

Although still listed in the ruling, AIG has settled the litigation for an undisclosed amount and is no longer a party in the case, said Pamela D. Hans, managing shareholder with Anderson Kill P.C. in Philadelphia, which represents TransCanada in the litigation.

To read the full article:  Insurers must pay $58 million in eight-month power plant unit shutdown

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