NEWYORK-May, 2011

Goldberg & Connolly's unique Policyholder Coverage Group represents policyholders in fully protecting their rights under their insurance policies. In the riskburdened construction industry, this frequently involves third party liability claims personal injury and wrongful death, as well as first party property damage claims for fire, flood, builders' risk, business interruption and project delays.With thewrongful disclaimer of coverage, contractors and subcontractors alike may be faced with both the considerable legal expense of defending themselves in the underlying accent case as well as, eventually, the serious financial loss of indemnifying the injured party that would otherwise be covered by its insurance policy. Goldberg & Connolly's attorneys are often called upon to defend client's interests in a variety of circumstances, including, Labor Law 240/241 (New York Scaffold Law) actions, when unjustified coverage disclaimers by compensated carriers leave policyholder companies completely at risk for the significant losses claimed by the plaintiff's, not tomention the legal expenses involved in defending the underlying accident-caused lawsuit(s). Similarly, when insured's suffer first party property damages or other business losses, the firm enforces the indemnity obligations of carriers under applicable commercial property policies, such as fire, flood, Builders' Risk, project delay and business interruption.


Goldberg & Connolly recently worked with a contractor who was denied payment when a large construction project suffered significant delays. The owner and its constructionmanager stopped all progress payments and denied the contractor's claim for delay damages. The owner's OCIP (Owner Controller Insurance Program) included Builders' Risk coverage that provided recovery for certain types of delays. The owner and construction manager did not want to allow the contractor to pursue its delay claims because the contractor was citing as reasons for the delays events and conditions that were specifically excluded from the insurance coverage. This placed the client in a very delicate situation - it could not acquiesce to the owner's version of the events as that would acknowledge that the client was not entitled to recover the delay damages it was seeking, but it also could not be deemed to have provided false information in the pending insurance claim. "Our insurance team's detailed knowledge of construction issues, such as contract and delay claims, coupled with its experience with insurance coverage disputes, is proving invaluable in guiding this client through this complicated and delicate matter involving millions of dollars in claims" said Henry L. Goldberg, Esq., Managing Partner, Goldberg & Connolly.


Goldberg & Connolly also recently worked with a general contractor whose progress payments totaling several millions of dollars were stopped by NYC when a personal injury action was commenced against the owner. The injured worked was an employee of a sub-subcontractor. The prime contract and all subcontracts required that the contractors and subcontractors provide insurance covering, as additional insureds, all "upstream" contractors and NYC, as owner. By the time NYC notified the contractors of the lawsuit by the subcontractor's injured worker, so much time had elapsed that the client's (general contractor) insurance company denied coverage for late notice of the accident and the lawsuit. Goldberg & Connolly was able to work with the lower tier subcontractor's carrier to have the insurance company appoint defense counsel, with a reservation of rights (ROR), regarding eventual indemnity. The carrier agreed to defend the owner, the general contractor and all higher tier subcontractors. The NYC then re-started all the progress payments to the general contractor. Goldberg & Connolly's Policyholder Coverage Group was able to achieve this successful result in only a matter of several weeks.


One of the complexities of an insurance coverage dispute is that it often involves not one, but two lawsuits that must be pursued by the client. First, the client must defend the personal injury action by the injured worker or by the higher tier contractor that is seeking indemnification and insurance coverage for the personal injury action. Second, the client may need to sue its insurance company to obtain a declaration that the insurance company must provide coverage for the underlying lawsuit. Goldberg & Connolly has been successful in obtaining contribution from the insurance companies for the settlement with the plaintiff in the underlying personal injury lawsuit, even when the coverage lawsuit against the insurance company has not been resolved. Obtaining the benefits from the disputed insurance policy - coverage for the loss alleged by the injury worker and, where possible, payment for the attorney's fees incurred in defending the personal injury action - is the fundamental goal.