Lumber Liquidators Sued by Insurer Over $36 Million Settlement

Lumber Liquidators’ insurance company is suing the retail giant over coverage for the $36 million proposed in settlements over defect claims and its Chinese-manufactured wood flooring, which allegedly contained unsafe levels of formaldehyde, according to Law360.

The insurer, St. Paul Fire and Marine Insurance Co., provided excess policies, which provide coverage above an underlying limit of primary insurance, to Lumber Liquidators starting in June 2010.

Lumber Liquidators received initial approval for a $36 million settlement in its class action lawsuits in June, agreeing to pay $22 million in cash and $14 million in vouchers to members of two settlement classes.

The lawsuits stem from a 2015 60 Minutes expose alleging that the company’s Chinese wood flooring had formaldehyde levels as much as 13 times over the legal limit.

Lumber Liquidators has had disputes with its insurers since the bombshell report, suing nine insurance carriers in 2015 that refused to cover the losses from the lawsuits.