Madelaine, Chubb Argue Over Hurricane Damages at Second Circuit

A federal appeals court appeared unconvinced that a Chubb Ltd. property insurance policy is clear enough to exclude $50 million of hurricane damage suffered by Madelaine Chocolate Co.’s New York facilities.

The dispute hinges on whether a flood exclusion in Madelaine’s insurance policy relieves Chubb from having to fully pay for windstorm damages caused by Hurricane Sandy in 2012 at the chocolate maker’s offices in Rockaway. The insurer paid out $4 million in wind damages, but declined to cover the remaining amount.

Many policyholders were denied coverage from private insurers after Sandy inflicted more than $60 billion in damages across ...