Insurance coverage

Court tackles consequential vs. direct damages in insurance coverage dispute



court tackles consequential vs. direct damages in insurance coverage dispute | Texas avocado
















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Total Petrochemicals & Refining USA refinery at Houston Ship Channel. Credit: Google

Total’s call was more focused on Kinder Morgan’s actual coverage, which was capped at $6 million. The trial court sided with Kinder Morgan on this point, but Total claimed actual damages of $9 million and hoped to exceed the limit.

September 15, 2022 at 4:35 PM

5 minute read

Adolfo Pesquera

What do you want to know

  • A Houston appeals court has weighed definitions of consequential versus direct damages in a business-to-business dispute over insurance coverage.
  • In Texas case law, there is no clear line separating consequential damages from direct damages.
  • The dispute between two petrochemical refining companies has been sent back to reconsider damages, based on the court’s findings.

A Houston appeals court has returned a damages reconsideration case involving an insurance coverage dispute stemming from a workplace death.

A key issue raised concerned the arbitration of claims as to whether damages were consequential or direct – something the Fourteenth District Court of Appeals acknowledged in its opinion is not well defined in Texas case law.

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