Additional lawsuit against insurer filed

A third lawsuit has been filed against Lloyd’s of London after the insurer and its underwriters denied the claim of a Leilani Estates homeowner who had evacuated in the wake of eruption activity in May.

The suit alleges that Susie Osborne was sold a Lloyd’s home insurance policy when better options were available and illegally was denied her coverage after the home was apparently destroyed by fire.


According to the suit, Osborne evacuated Leilani Estates on May 3, and on May 25, she learned her home had caught fire after it spread from neighboring homes.

In a letter dated June 4, the county confirmed that the property had been destroyed.

Although the suit says the claim was filed based on fire and with no mention of lava, a July 19 letter from an adjuster working on behalf of Lloyd’s denied coverage on the basis of a lava flow exclusion contained in the insurance policy.

“Lloyd’s of London, along with (a) … company calling itself Affirmative Risk Management, and others were intent on denying Ms. Osborne’s claims for the loss of her home without proper investigation and without ever setting foot on her property,” Osborne’s attorney Jeffrey Foster said in a press release. “The alleged deceptive practices and bad faith conduct towards Susie and numerous other homeowners in Puna is grossly unfair and irresponsible.”

From the sale of the policy to the denial, Foster said Friday “it’s been one misdeed after the next in Susie’s case.”

“The expectation is that Lloyd’s and the various adjusting firms and their agents will make the decision to do the right thing — do the right thing to pay the people who paid Lloyd’s their premiums,” Foster said of the suit.

Osborne is head of Kua o Ka La New Century Charter School, whose campus was also destroyed by lava earlier this summer.

“It’s really discouraging to have to take this step, because in good faith, I purchased insurance for my home,” Osborne said, adding that she was informed that it was the only insurance available.

“It’s a very difficult situation to be in — heartbreaking — and now without any insurance support to rebuild or buy something, I feel very deceived.”

For now, Osborne said she’s focusing on her school, which has “successfully transitioned” to locations in Hilo.


She has recently submitted insurance documents for the school, and “I’m hopeful that will be a much easier process.”

Email Stephanie Salmons at

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