September 29, 2025

Texas Corporation Takes Legal Action Against Berkshire Hathaway

News Summary

GD Group Inc. has filed a lawsuit against Berkshire Hathaway Direct Insurance Company, alleging mishandling of their property insurance. The lawsuit arises from a water damage incident at GD Group’s Seguin property. They claim inadequate investigation and wrongful policy rescission, leading to significant financial losses. As GD Group seeks to recover damages, the implications of this case could reshape commercial property insurance practices in Texas.

Texas Business Sues Berkshire Hathaway Over Alleged Policy Rescission

GD Group Inc., a Texas-based corporation, has initiated legal action against Berkshire Hathaway Direct Insurance Company in a federal court located in San Antonio. The lawsuit accuses Berkshire Hathaway of rescinding GD Group’s commercial property insurance policy following a significant water damage incident that occurred in August 2024.

The lawsuit, officially filed on September 25, 2025, stems from an incident on or around August 8, 2024, when a ruptured sprinkler system caused extensive water damage at GD Group’s property in Seguin, Texas. The company claims that Berkshire Hathaway’s decision to cancel their insurance policy left it without coverage, resulting in escalating financial losses.

After the property damage incident, GD Group promptly submitted a claim to Berkshire Hathaway. The claim was acknowledged and assigned to adjuster Raj Shipwal. Shipwal worked alongside David Yoon from Engle Martin throughout the process of investigating the claim. On October 29, 2024, GD Group was informed that their claim was still under investigation, and despite a subsequent inspection confirming the extensive nature of the water damage, the insurer failed to make a definitive coverage determination.

On February 3, 2025, Berkshire Hathaway communicated to GD Group that it had rescinded the policy, citing alleged “material misrepresentation” during the policy application process. Following the rescission, Berkshire Hathaway refunded the premiums paid by GD Group. However, the Texas-based company expressed confusion regarding the cancellation, as their insurance agent had previously assured them that the application was accurate and complete.

Further complicating the situation, GD Group reported that attempts by its insurance agent to resolve discrepancies with Berkshire Hathaway were unsuccessful, with the insurer allegedly refusing to address the ongoing concerns. Meanwhile, GD Group’s property continued to incur damage, leading to significant income loss due to closure.

In light of the worsening conditions, GD Group hired Mutual Group Inc. to assess the damage. The assessment revealed that repairs would cost $1,210,175.43, alongside a projected business income loss of $474,012.96 and content loss estimated at $2,608,422.25. This information was subsequently furnished to Berkshire Hathaway, along with a pre-suit notice and demand submitted on May 30, 2025.

Berkshire Hathaway responded through attorney Christopher Burke on June 25, 2025, stating that GD Group’s policy had been rescinded due to the company allegedly filing three business claims in a span of three years, which were purportedly misrepresented during the application process.

The lawsuit against Berkshire Hathaway alleges multiple serious offenses, including bad faith, breach of contract, and deceptive insurance practices. GD Group contends that the insurer conducted an inadequate investigation and failed to provide timely explanations for their denial of the claim, thus violating Texas insurance law.

In the legal complaint, GD Group is seeking actual damages, policy proceeds, statutory damages, treble damages, interest, and attorney fees. As it stands, GD Group’s claim remains unpaid, and the company faces ongoing repercussions, including being named as a defendant in a related lawsuit regarding outstanding repairs.

The outcome of this case could have significant implications for how insurance companies manage policy rescission and the claims investigation process within the commercial property sector. At this stage, all claims and allegations within the lawsuit are subject to the complaint process, and no judicial determination has yet been reached.

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