TVA Kingston coal ash spill insurance
- The record does not name which of my species, waters, soils or forests were harmed.
After the December 2008 coal ash spill at Kingston, TVA said its insurers denied cover; arbitration awards followed. Which insurer paid which award is not fully confirmed.
Reported range; read only through search excerpts of TVA counsel's page. The cleanup was reported at about $1.1bn.
Status As of the latest date in the sources (December 2014 award reported): insurance recoveries reported at more than $250–335m; allocation by insurer not confirmed.
- Insurers — Paid after arbitration according to reports; amounts paid by each not confirmed
- TVA — Cleanup reported at about $1.1bn; insurance recoveries reported at more than $250–335m
What happened
On 22 December 2008 a coal ash spill took place at Kingston, involving 1.1 billion gallons of ash. The cleanup was reported at about $1.1bn.
According to TVA's counsel (Perkins Coie), all 14 insurers, first-party and third-party, denied cover. Three Bermuda excess insurers denied cover and two rescinded their policies for alleged misrepresentation in the application. The insurers' position as described by TVA's attorney was: "They claimed that this dredge cell was a dam and they asked us for a list of dams." The cell was not on the list. These statements come from search excerpts of the law firm's page, which returned a 403 error when opened.
Arch Re, with a $50m policy, argued non-disclosure and then paid about $42m in 2013, according to TVA's counsel as reported through the same excerpts.
In October 2013, Carrier Management reported that TVA was seeking "the policy limits of $150 million" from ACE Bermuda in arbitration and "another $50 million" from Zurich. TVA had collected $92m by October 2013. A London arbitration was reported to have awarded $150m plus $11m interest in late 2013, reported as ACE Bermuda's limit, and another $50m full-limits award followed in December 2014. In total, more than $250–335m was reported recovered. Which insurer paid which award is not fully confirmed.
The time from the spill to the collection of insurance was about six years.
- 2008Kingston coal ash spill, 22 December: 1.1 billion gallons of ash; cleanup later reported at about $1.1bn
- 2013October: TVA seeks "the policy limits of $150 million" from ACE Bermuda and "another $50 million" from Zurich in arbitration
- 2013Arch Re pays about $42m (per TVA counsel); $92m collected by October; late 2013: London arbitration reportedly awards $150m plus $11m interest
- 2014December: another $50m full-limits arbitration award reported
What was said
“They claimed that this dredge cell was a dam and they asked us for a list of dams.”
“the policy limits of $150 million”
“another $50 million”
Where accounts differ
Each party's account, side by side, with its source. The record does not settle these points; it shows them.
All 14 insurers denied cover; two Bermuda excess insurers rescinded their policies for alleged misrepresentation. Reported through search excerpts only.
"They claimed that this dredge cell was a dam and they asked us for a list of dams." The cell was not on the list.
Argued non-disclosure, then paid about $42m in 2013, per TVA's counsel (secondary source).
TVA sought "the policy limits of $150 million" from ACE Bermuda and "another $50 million" from Zurich in arbitration. Their own stated positions are not in the sources.
Carrier ManagementHow it looked
Shown
Recorded
- TVA sought "the policy limits of $150 million" from ACE Bermuda in arbitration and "another $50 million" from Zurich; $92m had been collected by October 2013.
- A London arbitration was reported to have awarded $150m plus $11m interest (late 2013), and another $50m full-limits award was reported in December 2014.
- Total insurance recoveries were reported as more than $250–335m, six years after the spill.
Who gained
Reached nature or the ground
Gained elsewhere
Responses on record
- TVA (via its counsel, Perkins Coie) (Date not recorded): All 14 insurers denied cover; three Bermuda excess insurers denied and two rescinded their policies for alleged misrepresentation in the application (reported through search excerpts).
- Arch Re (2013): Argued non-disclosure, then paid about $42m in 2013, per TVA's counsel (secondary, via search excerpts).
In court and with insurers
Lawsuits and rulings
- 2013Claimant won$150000bn Award of $150m plus $11m interest (reported as ACE Bermuda's limit)TVA arbitration against ACE Bermuda (London)London arbitration · Arbitration · TVA → ACE Bermuda (reported)
A London arbitration awarded $150m plus $11m interest in late 2013, reported as ACE Bermuda's limit. Which insurer paid which award is not fully confirmed.
- 2014-12Claimant won$50000bn Full-limits award (reported)TVA arbitration, $50m full-limits awardArbitration (forum not specified in the sources) · Arbitration · TVA → Insurer not confirmed (TVA sought another $50m from Zurich in arbitration)
Another $50m full-limits award was reported in December 2014. The paying insurer is not confirmed in the sources.
Insurers
- 2008Claim refused14 insurers (first- and third-party), per TVA's counsel → TVAStated reason: Per TVA's counsel: alleged misrepresentation in the application; the insurers claimed the dredge cell was a dam and asked for a list of dams.
All 14 insurers denied cover, according to TVA's counsel as read through search excerpts; two rescinded their policies.
- 2013In litigation$150000bn Policy limit sought; award of $150m plus $11m interest reportedACE Bermuda → TVAStated reason: Not stated in the sources.
TVA sought "the policy limits of $150 million" in arbitration. A London arbitration was reported to have awarded $150m plus $11m interest in late 2013. Carrier Management
- 2013In litigation$50000bn Sought in arbitrationZurich → TVAStated reason: Not stated in the sources.
TVA sought "another $50 million" from Zurich in arbitration. The sources do not confirm the outcome for Zurich. Carrier Management
- 2013Refused, paid after suit$42000bn Reported paid, approximately (policy $50m)Arch Re → TVAStated reason: Argued non-disclosure.
Arch Re, with a $50m policy, argued non-disclosure and then paid about $42m in 2013, per TVA's counsel (secondary source, via search excerpts).
What nature saw
Nature's report opens this page. Below: further outcomes measured on the ground.
What we don't know
Nature
- Not measured Harm to nature: The record holds no measurement of harm to nature.
Figures
- Insufficient Insurance paid out: Total recovered per reported range; allocation by insurer not confirmed.
- Insufficient Insurers that declined cover: Per TVA's counsel, via search excerpts only.
Accounts
- Disputed Was cover available for the Kingston spill?
- None on record ACE Bermuda and Zurich: TVA sought "the policy limits of $150 million" from ACE Bermuda and "another $50 million" from Zurich in arbitration. Their own stated positions are not in the sources.
Record
- None on record Which insurer paid which award is not fully confirmed.
- Insufficient Reported but not independently verified: that all 14 insurers denied cover, that two Bermuda excess insurers rescinded their policies, that Arch Re paid about $42m, and the quoted insurer position on the dredge cell. These come from TVA counsel's page as read through search excerpts only (the page returned 403).
- Insufficient Reported but not independently verified: the total recovery of $250–335m and the 2013 and 2014 award amounts.
Did the harm stop?
Not recorded in the sources reviewed.
Who paid?
The cleanup was reported at about $1.1bn. Insurance recoveries were reported at more than $250–335m, collected over about six years after arbitration; the allocation by insurer is not confirmed.
Sources
Press and investigations
- Carrier Management article, 17 October 2013 (title not recorded)Carrier Management · 2013-10-17
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