A Texas business is accusing Berkshire Hathaway Direct Insurance Company of yanking its commercial property policy and stonewalling a multimillion-dollar water damage claim.
GD Group Inc., a Texas-based corporation, filed suit in federal court in San Antonio, alleging that Berkshire Hathaway Direct Insurance Company rescinded its property insurance policy after a sprinkler system failure left its Seguin property severely damaged. The complaint, filed on September 25, 2025, claims the insurer’s actions left the business without coverage and facing mounting losses.
According to the complaint, the trouble began on or about August 8, 2024, when a ruptured sprinkler system caused widespread water damage to GD Group’s property and its contents. GD Group submitted a claim to Berkshire Hathaway, which was acknowledged and assigned to adjuster Raj Shipwal, who retained David Yoon with Engle Martin to assist in the investigation.
The complaint states that on October 29, 2024, Berkshire Hathaway informed GD Group that the claim was under investigation. Despite the inspection confirming extensive water damage, GD Group alleges that Berkshire Hathaway did not issue a coverage determination. Instead, the insurer later notified GD Group that it was rescinding the policy effective February 3, 2024, due to a “material misrepresentation made to BHDIC during the policy application process.” Berkshire Hathaway refunded the premiums.
GD Group claims it was “fundamentally bewildered” by the cancellation and refund. The company’s insurance agent advised that the application was properly submitted and that loss runs had been provided to the broker. The agent contacted Berkshire Hathaway in an attempt to resolve the issue, but the insurer refused to resolve it and reimbursed all premium payments to GD Group.
While the dispute continued, the property allegedly continued to suffer further damage, and the business lost income due to closure. GD Group retained Mutual Group Inc. to inspect the property. Mutual Group Inc. photographed the damage and evaluated the cost to repair and replace the damage at $1,210,175.43. Business income loss was evaluated at $474,012.96, and loss of contents at $2,608,422.25. GD Group provided this information to Berkshire Hathaway and sent a pre-suit notice and demand on May 30, 2025.
Berkshire Hathaway, through attorney Christopher Burke of Hinshaw & Culbertson, LLP, responded on June 25, 2025, stating that the policy had been rescinded because GD Group had filed three business claims in the three years prior to the loss and allegedly misrepresented these claims in the application process. Berkshire Hathaway maintained its denial of the claim.
The complaint accuses Berkshire Hathaway of bad faith, breach of contract, deceptive insurance practices, and late payment of claims. GD Group alleges that the insurer failed to conduct a reasonable investigation, did not provide timely or adequate explanations for denial, and violated multiple provisions of Texas insurance law. The company seeks actual damages, policy proceeds, statutory damages, treble damages, interest, and attorney fees.
While the complaint references the insurer’s obligation to pay the “replacement cost of all damage which occurred to Plaintiff’s Property caused by a covered peril,” and the insured’s duty to pay premiums and perform obligations under the policy, no specific policy clauses are quoted in the document.
As of the filing, GD Group’s claim remains unpaid, and the business reports ongoing harm, including being named as a defendant in a related lawsuit over repairs that remain unaddressed due to the unpaid claim. The outcome of this case could have significant implications for how insurers handle rescission and claims investigations in the commercial property space.
The case is at complaint stage. All claims and allegations remain just that—allegations. No decision has been made.
