The American owner of the rebuilt Babine Forest Products Mill in Burns Lake is suing one of its insurers, which the company claims has not paid the full amount owed under its policy.
Hampton Investment Co. and Babine Forest Products filed a civil claim in B.C. Supreme Court October 29.
In it, it claims the Great American Insurance Co. has not paid the full amount of a $30 million excess insurance policy on the rebuild of the Burns Lake mill, destroyed in an explosion and fire in 2012.
The Oregon-based company has never said how much it cost to rebuild the sawmill in Burns Lake, which reopened in the spring of this year, although when the company’s CEO, Steve Zitka, announced in 2012 that his company would rebuild, he told media that the company would commit up to $100 million to rebuilding the mill.
The cost of replacing the mill was covered under two insurance policies – a primary policy with the Lumberman’s Underwriting Alliance and an excess policy with Great American Insurance Co.
According to court documents, the primary policy did not fully cover the company’s losses.
The claim does not state how much it has received under the primary policy.
The excess policy was for coverage up to $30 million. Hampton claims Great American has failed to cover the full amount of the excess insurance coverage.
“The defendant has paid some of the monies owing under the excess policy but not the amount that it is obliged to pay,” the claim states.
The claim does not state how much short the payout has been, and the company’s lawyer, Louis Zivot of McMillan LLP, said he could not say what the shortfall is.
Business in Vancouver could not reach a spokesperson for Hampton Affiliates, the parent company of Babine Forest Products.
Two sawmill workers were killed and 20 injured when the Babine Forest Products sawmill in Burns Lake exploded January 20, 2012.
A WorkSafeBC investigation concluded the explosive fire was likely caused by the buildup of wood dust in a motor of a conveyor system. The damning report said the fire was preventable.
WorkSafeBC forwarded its files to Crown prosecutors, which said it could not proceed with a criminal investigation because WorkSafeBC investigators had failed to obtain search warrants or properly warn the people it interviewed about their Charter rights.
However, in January 2015, WorkSafeBC fined the company $1 million, saying the fire was preventable. A coroner’s inquest was also launched.
@nbennett_biv
