What happened: Travelers alleges Southwest Marine wrongfully denied additional insured coverage for property owners after a 2017 construction site ladder fall
Who's involved: Travelers Indemnity Company of America and Southwest Marine and General Insurance Company, with On Target Sheet Metal as the subcontractor insured
What's at stake: Defense costs Travelers says it has advanced since 2017, exceeding $75,000
Why it matters: The dispute turns on how blanket additional insured endorsements and subcontract insurance clauses interact in construction injury cases
Where it stands: Complaint filed October 12, 2026, in the US District Court for the Eastern District of New York
A sheet metal worker fell from a ladder on a New York City construction site in January 2017. Nearly a decade later, two insurers are still arguing about who should be paying the defense bills.
Travelers Indemnity Company of America filed a declaratory judgment complaint on October 12, 2026, in the US District Court for the Eastern District of New York, alleging that Southwest Marine and General Insurance Company has wrongfully refused to defend or cover three property owner and manager entities as additional insureds under a commercial general liability policy.
The dollar figure is not capped in the filing, but Travelers says the defense costs it has advanced already exceed $75,000 - and that they continue to grow.
The case traces back to a construction project at 438 East 12th Street in Manhattan. On Target Sheet Metal Corp., a subcontractor insured by Southwest Marine, was performing sheet metal work under a subcontract with general contractor Ener-Con Technical Services. A worker employed by On Target fell from a ladder on January 19, 2017, and was injured.
The worker sued the property owners - 181 Avenue A, LLC, Steiner Building NYC, LLC, and CM & Associates Construction Management, LLC - in Bronx County Supreme Court, alleging negligence and violations of New York Labor Law sections 200, 240, and 241(6). New York's section 240, commonly known as the Scaffold Law, imposes strict liability on property owners and general contractors for gravity-related injuries at construction sites - regardless of who was at fault.
Travelers insured the general contractor, Ener-Con, under a CGL policy with a blanket additional insured endorsement. It accepted the defense of the three owner and manager entities. Then it looked down the contractual chain.
On June 8, 2017, Travelers asked Southwest Marine to pick up the defense. The basis: On Target's subcontract and the CGL policy Southwest Marine had issued to On Target. That policy carried a blanket additional insured endorsement - the standard industry form CG 20 10 04 13 - covering anyone whose liability arose, in whole or in part, from On Target's work.
Southwest Marine said no. Its denial, dated September 15, 2017, rested on two grounds, according to the complaint: first, that Ener-Con was not a party to the underlying personal injury action; and second, that the subcontract contained no provision requiring the owner entities to be named as additional insureds.
Travelers says both grounds are wrong.
The complaint walks through the contractual chain in detail. The subcontract between Ener-Con and On Target, dated November 3, 2015, required On Target to carry CGL insurance with minimum limits of $1,000,000 per occurrence and $2,000,000 in the aggregate. It also required On Target to name the "Owner/GC" and "Managing Agent" as additional insureds, with coverage on a primary and non-contributory basis.
On Target then provided Ener-Con with an ACORD 25 certificate of insurance listing 181 Avenue A, LLC, Steiner Building NYC, LLC, and CM & Associates Construction Management, LLC as additional insureds under Southwest Marine's policy "as required by written contract."
In August 2018, the owner entities filed a third-party complaint against On Target in the underlying action, alleging that On Target had failed to indemnify them and to procure insurance naming them as additional insureds.
Travelers says it has continued to incur defense costs on behalf of the owner entities throughout.
Travelers is asking the court to declare that Southwest Marine must defend and indemnify the three owner and manager entities, that Southwest Marine's coverage is primary and non-contributory, and that Southwest Marine must reimburse Travelers for all defense costs advanced since the June 2017 tender.
None of the allegations in Travelers' complaint have been tested in court, and no court has ruled on the merits.
Defense cost exposure in additional insured disputes can quietly compound for years after a tender is denied - and the gap between the September 2017 denial and this October 2026 lawsuit shows just how long that meter can run.
