Idaho Club owners sue insurers for inadequate coverage

Owners of the Idaho Club golf course near Sandpoint have sued insurers for failing to provide “business interruption” coverage in the wake of a fire last December that razed the resort’s grand clubhouse and restaurant.

Idaho Club attorney John Magnuson said the golf course owners inquired about an insurance policy two years ago that would cover obligations for the members. The owners were assured that such coverage was unnecessary because of the “start-up nature” of the club.

The fire brought the issue of the club’s membership services obligations to the fore.

The lawsuit filed last week in Kootenai County 1st District Court seeks an unspecified sum from a trio of insurers, including American State Insurance Co., Safeco Insurance Co. and AFGO LLC, that do business in Sandpoint as Harris-Dean Insurance.

The suit also names insurance agent Angela Potts as a defendant.

Potts, who said she didn’t know of the lawsuit until she was e-mailed a copy of the summons and complaint Tuesday by The Spokesman-Review, did not return a phone call seeking comment. Idaho Club owners say Potts should have known the amounts and types of coverage necessary to offer the club complete insurance protection.

Left underinsured and forced to pay for membership obligations without revenues from a clubhouse, the club owners are pursuing four claims, including professional negligence and breach of contract.

Built of log and stone, the multimillion-dollar clubhouse served business retreats, personal getaways, weddings and parties.

The clubhouse is fully insured and club President Chuck Reeves has said he intends to rebuild.

It cost about $6.2 million to build more than six years ago as part of a makeover of the former Hidden Lakes Golf Resort between Hope and Sandpoint along the Pack River.