The Port of New Orleans approved a $97.5 million settlement with a major insurer over damages the port sustained during Hurricane Katrina.
The port said Johnston, R.I.-based FM Global had insured it for up to $145 million in hurricane damage to its property.
The port’s chief executive officer, Gary LaGrange, said the agreement involved “a fair offer for the damages sustained during Hurricane Katrina.”
“Settling this lawsuit allows us to close the chapter on our Katrina insurance claim, continue making repairs and avoid a costly and protracted battle of lawsuits and appeals,” LaGrange said.
The port’s governing board approved the deal.
The suit was filed in state district court in August 2006 against FM Global and the port’s other insurer, Lexington Insurance Co., to cover the port against the general one-year limitation on suing insurance companies over claims disputes. That was a common practice for anyone who had not reached a settlement for damages from Katrina, which hit Aug. 29, 2005.
The lawsuit later was transferred to federal court. Before the settlement, Lexington paid the full $20 million hurricane limitation on its policy and FM Global advanced the port money to begin some repair projects.
Port spokesman Chris Bonura said the full replacement value of port property damaged by Hurricane Katrina was $240 million, while the actual cash damages totaled $166 million.
Bonura said the port was in talks with the Federal Emergency Management Agency for additional damage funding, but could not speculate on how much FEMA might provide. The agency, so far, has sent the port about $4 million.
“We can’t make a firm FEMA request until we get our insurance payments behind us,” he said.
FM Global did not return a call for comment.
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