A lawsuit against insurers by US rail passenger company Amtrak hinges on the definition of “flood” and whether damage inflicted by Superstorm Sandy was one or several occurrences.

The government-owned rail operator is suing 17 US insurers and a number of Lloyd’s underwriters.

At stake is an initial claim for more than $US270 million ($305 million), although Amtrak estimates its total losses at $US504 million ($569 million).

The exposure limit under the policies is $US675 million ($762 million). 

Most of the insurers say Amtrak is not entitled to receive more than $US125 million ($141 million), which is the flood sub-limit under the various policies.

So far they have paid out less than $US30 million ($33.9 million).

Amtrak says it suffered damage to rail lines, tunnels, bridges and other infrastructure in New York when Sandy struck in October 2012.

In a complaint filed in the Southern District Court in New York, it says it has been unable to recover more than “a token amount” from its insurers.

“The plain language of those policies calls for defendants to pay Amtrak’s claim up to the limits of each policy,” the company says. 

While the insurers maintain most of the damage resulted from a flood, Amtrak argues it was caused by the storm surge from Sandy that inundated areas of New York City and the New Jersey shore. It also maintains the damage resulted from more than one event.

The company says the lawsuit – the largest so far to result from the estimated $US72 billion ($81.3 billion) of damage caused by Sandy – is intended to “break the deadlock” with insurers.