Liberty Insurance is taking Great American Risk Solutions to court, alleging the rival insurer dodged its duty to defend and indemnify in a high-stakes construction injury lawsuit.
Liberty Insurance Corporation has filed a complaint in the US District Court for the Southern District of New York against Great American Risk Solutions Surplus Lines Insurance Company, formerly known as American Empire Surplus Lines Insurance Company. At the heart of the dispute is Liberty’s claim that Great American has failed to defend and indemnify HCI Cerberus PCNY Owner LP, Park Central Hotel (DE) LLC, and Highgate Holdings, Inc. (the “Insureds”) in a tort action currently pending in the Supreme Court of the State of New York, County of Bronx.
The underlying lawsuit, brought by Jose Almendarez, alleges that on May 11, 2020, Almendarez was working at 870 7th Avenue, New York, NY, at an elevated height on a scaffold, when he fell and was injured. The action includes claims of negligence and violations of Sections 200, 240(1) and (2), and 241(6) of the New York Labor Law, as well as a claim for loss of consortium by Almendarez’s wife. Rally Restoration Corp. impleaded C&D Maintenance Inc., alleging common law indemnity, contribution, contractual indemnity, and breach of contract for failure to procure general liability insurance. R. Park Central L.L.C., O. Park Central L.L.C., and T. Park Central L.L.C. also impleaded C&D, making similar claims.
According to the complaint, Rally and C&D entered into a subcontract in February 2019, which required C&D to procure and maintain insurance protecting the contractor, owner, and others, with minimum limits of $1,000,000 each occurrence and $2,000,000 aggregate. The contract also required that C&D’s insurance be primary and non-contributory, with the contractor’s and owner’s insurance excess to C&D’s insurance.
Great American issued a commercial lines policy to C&D as a named insured, with an each occurrence limit of $2,000,000 and an aggregate limit of $4,000,000. The policy contains an endorsement titled “Additional Insured – Owners, Lessees or Contractors – Scheduled Person or Organization,” which extends coverage to additional insureds for liability caused by the acts or omissions of the named insured in ongoing operations, provided such coverage is required by contract. The policy also has an endorsement stating that coverage for additional insureds is primary and non-contributory if required by an insured contract.
Liberty issued a commercial general liability policy to Highgate Hotels, LP, as the first named insured. The Liberty policy contains an “Other Insurance” provision stating that its insurance is excess over any other primary insurance available to the insured for liability arising out of premises or operations for which the insured has been added as an additional insured.
Liberty alleges that it tendered the defense and indemnity of the Insureds for the underlying action to Great American by letter dated February 3, 2022, and again by letter dated July 29, 2024. According to the complaint, Great American failed and refused to respond to these tenders. As a result, Liberty claims it was forced to provide a defense for the Insureds in the underlying action and seeks a declaratory judgment that Great American’s policy is primary, with Liberty’s coverage applying only as excess. Liberty also seeks reimbursement for the costs it has incurred defending the Insureds.
The complaint highlights the challenges insurers face in complex construction and workplace litigation, where multiple parties and overlapping insurance policies often lead to disputes over who pays first. The outcome of this case could impact how insurers draft, interpret, and enforce “other insurance” and “additional insured” provisions in commercial liability policies.
As of now, these are only allegations - no facts have been established, and the court has yet to rule on the merits. For insurance professionals and industry watchers, the case is a reminder of the importance of clear policy language, prompt insurer response, and the financial stakes in coverage disputes.
