Why Edison International Stock Just Crashed
If Edison International sparks a wildfire, it will have to pay for it.
Overview
California electric utility stock Edison International (NYSE: EIX) crashed 24.2% through 2 p.m. ET Monday after a legislative effort in Sacramento to limit utilities' exposure to lawsuits from insurance companies fell apart over the weekend.
Image source: Getty Images.
As Sacramento NBC affiliate KCRA 3 reports, Gov. Gavin Newsom was promoting legislation that would partially insulate Edison International and similar utilities from liability for wildfires caused when their equipment malfunctions. When homes are destroyed in a wildfire, homeowners file home insurance claims with their insurance companies -- which in turn try to "subrogate" their liability by suing the electric utility they deem responsible for the fire.
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Source
Originally published at www.fool.com.