An insurer-on-insurer fight over who should be footing the defense bill in a Brooklyn construction injury case has landed in federal court.
GuideOne National Insurance Company filed a declaratory judgment action on March 11, 2026, in the US District Court for the Eastern District of New York, naming Hiscox Insurance Company Inc. and Colony Insurance Co. as defendants. At the heart of the dispute: whether Hiscox and Colony are obligated to defend and indemnify a group of defendants in an underlying personal injury lawsuit - and whether they should be doing so on a primary and noncontributory basis.
The underlying case stems from a November 2021 incident at the Independence Towers construction project in Brooklyn, where a worker named Wilson Galarza alleges he fell from a ladder and suffered serious, permanent injuries. The defendants in that lawsuit - including the New York City Housing Authority and several affiliated entities - are insured by GuideOne under a commercial general liability policy. According to the filing, GuideOne has been covering all defense costs, which have already exceeded $75,000 and continue to climb.
GuideOne's position is straightforward: under the contracts governing the project, both Bonafide Builders, Inc., the trade contractor, and its subcontractor GSPE Interior Construction Corp. were required to name the project defendants as additional insureds on their respective CGL policies. Colony insured Bonafide; Hiscox insured GSPE. Both policies contain additional insured endorsements that, GuideOne contends, are triggered by those contractual requirements.
What makes this case particularly worth watching is how the coverage denials reportedly unfolded.
According to the filing, Hiscox initially turned down the claim in early 2022 by pointing to the Employer's Liability exclusion - reasoning that Galarza was an employee of GSPE. But when GuideOne came back with another tender in late 2025, Hiscox allegedly took the opposite position, now characterizing Galarza as a Bonafide employee and effectively walking back any acknowledgment that GSPE was involved in the project at all.
Colony's denial took a different route but ended up in the same place. Colony reportedly acknowledged that the project defendants could "potentially qualify as additional insureds" under its policy. But it ultimately declined coverage, citing a condition that required its insured's subcontractors to carry adequate insurance - a condition Colony said was not met because Hiscox had denied coverage to GSPE. In other words, one insurer's denial became the basis for the other's.
GuideOne is now asking the court to declare that both Hiscox and Colony owe defense and indemnity obligations on a primary and non-contributory basis and to order reimbursement of all defense costs paid to date.
No determination on the merits has been made.
