The port sustained approximately US$160m in damages during Hurricane Katrina. So far, it has collected approximately US$30m from its insurers, including payment of the US$20m policy limit from its primary property insurer, Lexington Insurance Company. The port concluded negotiations with Lexington last September while continuing ongoing negotiations with its other property insurer, FM Global.
The port is insured through FM Global for up to US$500m in damages. However, the policy includes sub-limits of US$65m for named wind storms such as Hurricane Katrina and US$80m for flood loss. That means the effective total policy maximum for the port’s Katrina-related damage is US$145m, in addition to the US$20m provided by the Lexington policy.
The Port of New Orleans has been a partner with FM Global for more than 20 years and has never made a claim against its policy in that time. The 2006 premium was US$1.1m. Since October, the port says it “has been trying to expedite discussions with FM Global to come to a quick and equitable resolution of the claim”. FM Global has so far paid out approximately US$8m.