When Hurricane Sandy hit last October, few who were in its path got through it unscathed. New York’s bike sharing system was no exception. While program operator Alta Bicycle Share was working out software bugs that delayed the launch by about a year, the warehouse that held the equipment  flooded—damaging bikes, kiosks and other electronic equipment.

According to the Portland Mercury, this set back the operator $11 million, which it expected to be covered by insurance. Now, it seems, the insurance provider and broker won’t pay the full amount that Alta claims it’s owed. So Alta is suing.

From the Portland Mercury:

According to the suit, Hanover Insurance Company, through local agents at Portland firm USI Northwest, agreed to insure the New York bike-share system for up to $40 million. But following the storm and flooding, Hanover paid out just $5 million, refusing to cover full damages. The suit claims Hanover owes another $6 million, and accuses USI of negligence.

If Alta gets what it wants, it has no public obligation to use the funds in any particular way. While it might be used to pay debts, divide profits, or settle disputes with former employees, a win for Alta could be an opportunity to expand Citi Bike or its other North American programs into neighborhoods pleading for some infrastructure investments.

  • SurfNinja80

    Alta should use the funds to expand Citi Bike into areas affected worst by Sandy like Redhook–which desperately needs more transportation options!