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Paul Kiesel
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Washington Metro Accident Will Prove Costly for Everyone Involved

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From Bloomberg News:

July 15 (Bloomberg) — American International Group Inc. and insurers at Lloyd’s of London are among firms that may face a combined total of more than $100 million in claims tied to the Washington Metro crash that killed nine people last month.

The costs to the pool of insurers, which also includes Bermuda-based XL Capital Ltd. and Warren Buffett’s Berkshire Hathaway Inc., will depend on estimates of medical care, loss of expected lifetime earnings and the degree of negligence by the Washington Metropolitan Area Transit Authority.

The cost “will easily exceed $100 million,” said Peter Grenier, a lawyer at Washington-based Bode & Grenier LLP, who negotiated a $2.3 million settlement for a man who lost his wife when she was struck by a Metro bus in 2007.

The train accident may weigh on results at insurers after investment declines and falling rates pressured the firms. U.S. property and casualty carriers posted a record $1.3 billion first-quarter loss, compared with profit of $8.5 billion a year earlier, according to Insurance Services Office Inc.

The June 22 Metro accident, the deadliest in the city’s history, occurred when one train, operated by a computerized system, collided into another, National Transportation Safety Board member Debbie Hersman said June 23 in a press conference.

It was the worst U.S. commuter crash since an incident last September in Southern California involving a Metrolink commuter train and a Union Pacific Corp. freight train. The Metrolink operator and 24 passengers died.

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