What happened: Skyscraper Insurance Services alleges its flood insurer denied a $220K claim and voided the policy, then renewed it a month later
Who's involved: Skyscraper Insurance Services (brokerage) and MS Transverse Specialty Insurance Company (insurer)
What's at stake: $226,359.91 in repair and emergency mitigation costs for flood damage to a commercial building
Why it matters: The case tests whether an insurer that renews a policy after invoking rescission has waived its right to deny coverage
Where it stands: Complaint filed November 4, 2026, in the US District Court for the Southern District of New York
An insurer denied a flood damage claim, declared the policy void from day one and promised a full premium refund. The refund never came. What did come, according to a new federal complaint, was a renewal.
Skyscraper Insurance Services, a licensed insurance brokerage in Spring Valley, New York, filed the suit against MS Transverse Specialty Insurance Company on November 4, 2026, in the US District Court for the Southern District of New York. MS Transverse is a specialty insurer within the Mitsui Sumitomo Insurance / MS&AD Insurance Group Holdings family.
The dispute turns on a single question in a flood insurance application - and whether the brokerage's answer was actually wrong.
When Skyscraper applied for commercial flood coverage in September 2024, the application's Loss History section asked whether the building had sustained, among other things, a prior flood loss to the "structure" of $25,000 or greater, according to the complaint. The property had sustained one prior flood loss in September 2023, adjusted under a Lloyd's of London policy. But the portion of that loss attributable to the building's structure was $16,495.89 - well below the threshold, the filing says.
The bulk of the prior claim was for emergency water mitigation, cleaning, debris removal, cabinetry tile regrouting and similar work, according to the complaint. None of it involved repair or replacement of the structure itself.
MS Transverse issued a private flood policy on the basis of that application, providing building property coverage of up to $501,000, subject to a $5,000 deductible, for total annual policy charges of $1,048.04.
On June 23, 2026, the insured premises sustained flood damage. The complaint alleges the replacement cost to repair the building was $220,296.48, with an additional $11,063.43 in emergency mitigation costs.
Skyscraper notified the insurer through its third-party administrator, Peninsula Insurance Bureau. On August 5, 2026 - before the insurer had made a decision on the claim - Skyscraper, through its public adjuster, provided the prior loss estimate and the structural breakdown showing the $16,495.89 figure, the filing states.
The insurer denied the claim anyway. In a letter dated August 25, 2026, MS Transverse rejected the claim in its entirety on the ground of an alleged material misrepresentation in the application, according to the complaint. The denial letter stated that when applying for flood insurance, the brokerage had represented that the building "had not experienced any prior flood events," the complaint says. The letter declared the policy rescinded from inception and stated that "a check will be issued to the named insured representing the full refund of premiums paid, with interest."
That refund never arrived, the complaint alleges. No rescission was carried out. No premiums were returned.
Then came the turn. A little more than a month after declaring the policy void, MS Transverse renewed it - issuing coverage for the period September 28, 2026 to September 28, 2027, according to the complaint. It invoiced and accepted the renewal premium.
The insurer's own policy contained a condition stating that a policy voided for misrepresentation "cannot be renewed," the filing says. Yet the insurer renewed it, with full knowledge of the prior loss it had cited as grounds for voiding the coverage, the complaint alleges.
Skyscraper argues it answered the application honestly: the Loss History section asked only about flood losses to the "structure" of $25,000 or more, and the structural damage from the prior loss was $16,495.89, the complaint says.
The brokerage also points to New York Insurance Law section 3105(b)(1), which says an insurer can only void a policy over a misrepresentation if the insurer can prove the misrepresentation was material - meaning it would have refused to issue the policy had the truth been known. The renewal with full knowledge of the prior loss undercuts that argument, the complaint contends.
Skyscraper brings three causes of action: two asking the court to declare that the policy was in force on the date of the loss and that MS Transverse must provide coverage, and a third for breach of contract. The brokerage seeks not less than $226,359.91 in damages, plus statutory interest, and has demanded a jury trial.
For claims and underwriting professionals, the case is a reminder that what an insurer does after a denial can matter as much as the denial itself. Renewing a policy on the same facts used to void it is exactly the kind of conduct New York courts have treated as giving up the right to deny coverage.
The allegations in the complaint have not been tested, and no court has made any ruling on the merits.
