Two insurers have asked a federal court to declare that Zurich must defend a contractor as an additional insured, a new complaint says.
Valley Forge Insurance Company and Northern Colorado Constructors, Inc. (NCC) filed a declaratory judgment action against Zurich American Insurance Company on July 23, 2026, in the US District Court for the Southern District of New York, according to the complaint. They are asking the court to declare that Zurich must defend and indemnify NCC as an additional insured under a commercial general liability policy that Zurich issued to Griffin Dewatering LLC.
The dispute stems from a $13.5 million contract to build approximately 7,400 feet of sanitary sewer pipe for the City of Westminster, Colorado, the filing states. NCC engaged Griffin as its dewatering subcontractor, the work of keeping groundwater out of the trenches during construction, according to the complaint.
The City later brought its own suit. In City of Westminster v. Northern Colorado Constructors, Inc., et al., pending in Colorado state court, the City contends that several sections of the new pipe are sagging and that settling backfill has caused significant damage, the complaint says. The City alleges the damage was caused by defective and negligent design and construction performed by NCC and others, and claims damages "well in excess of $1 million," according to the filing.
Valley Forge and NCC allege that Griffin's dewatering operations caused, at least in part, the sagging and settlement, and that the subcontract required Griffin to name NCC as an additional insured. Under section 8.2.2, the contractor was to be "named as additional insureds," with that coverage set to "apply as primary insurance," the complaint says.
The plaintiffs allege, on information and belief, that the Zurich policy carried a $2 million each-occurrence limit and a $4 million general aggregate limit and was in effect from February 3, 2020 to February 3, 2021. They allege NCC satisfies the terms of the policy's additional insured endorsement and is entitled to a defense and indemnity.
According to the complaint, Valley Forge tendered NCC's defense to Zurich on April 4, 2025, followed up on May 2, 2025, and tendered again on July 17, 2025. The filing states that Zurich "has failed to respond to any of the tender letters."
The suit brings three causes of action: declaratory judgment, breach of contract, and equitable subrogation and contribution. Valley Forge, which the complaint says has incurred defense costs on NCC's behalf, seeks reimbursement of those costs, plus interest.
For carriers and claims professionals, the filing sets out a familiar coverage question: whether a subcontractor's primary policy must respond, on a primary and non-contributory basis, to a claim against an upstream contractor named as an additional insured, and how tender correspondence factors into any later reimbursement demand.
The allegations in the complaint have not been tested, and no court has ruled on whether Zurich owes NCC a defense or coverage. The claims against NCC in the underlying Colorado action also remain unproven allegations.
