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Lumber Liquidators Sues Insurers for Dropping Coverage


May 12, 2015 — Insurance companies are refusing to provide coverage for Lumber Liquidators as it faces a growing number of legal headaches, including class actions and over 100 lawsuits.

The New York Post reports that Lumber Liquidators has sued nine insurance companies in state court in Wisconsin, including Liberty Mutual, Wausau Business Insurance, CNA Group, and units of Travelers Companies.

Those insurers are accused of breach of contract. According to the complaint, they “wrongfully refused to defend (Lumber Liquidators) in accordance with the terms of commercial liability insurance policies they issued.”

Lumber Liquidators is also seeking compensation for damages related to the problems the dispute has caused. The company says it has faced “uncertainty” when attempting to deal with accusations of toxic levels of formaldehyde in its flooring.

CNBC reports that the complaint goes on to state:

“As a result of these disagreements, [Lumber Liquidators] faces substantial uncertainty in determining its entitlement to a defense, or to indemnification for any judgments or settlements under the policies.”

Lumber Liquidators and/or its insurance companies are facing potentially tens of millions of dollars in litigation costs, settlements, and payments to individuals who had health problems or were forced to remove and replace toxic flooring.

Although Lumber Liquidators continues to defend the safety of their flooring, last week they stopped selling all Chinese laminate flooring. In March, an investigation by 60 Minutes accuse the company of boosting profits by selling formaldehyde-ridden flooring that was mislabeled as compliant with California laws.


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