A Liberty Mutual subsidiary is seeking more than $3 million from a New York contractor over alleged defaults on three bonded construction projects.
Ohio Casualty Insurance Company filed the action on April 1, 2026, in the Southern District of New York, naming New Style Contractors, Inc., NSC Associates Corp., and two individual indemnitors - Artur Nowak and Barbara Nowak - as defendants. The case has not yet been decided, and the claims remain unproven.
At the center of the dispute is a General Agreement of Indemnity for Contractors, or GAI, that the parties entered into in August 2017. Under that agreement, Ohio Casualty - which underwrites surety business as part of the Liberty Mutual Group - issued payment and performance bonds totaling approximately $19.8 million across three construction projects in New York. The largest of the three, the Queensborough Community College Performing Arts Center ADA Reconstruction, carried a bond of $10,824,000. The Baskerville Hall Interior Renovation at City College of New York was bonded at $4,924,000, and the Marshall Lecture Rooms and Bathrooms Renovations at $4,074,000.
According to the court filing, Ohio Casualty began receiving claims from bond obligees on all three projects, each alleging that New Style had failed to meet its payment and performance obligations under the bonded contracts. Ohio Casualty says it investigated those claims, found certain ones to be valid, and has since incurred $3,142,358.00 in losses - a figure it says continues to grow.
What makes this case worth watching for surety professionals is the indemnity language at issue. The GAI required the indemnitors to "exonerate, hold harmless, indemnify, and keep Surety indemnified from all liability for Loss" and to reimburse the surety for any disbursements made "in good faith under the belief that it is or was or might be liable for the sums and amounts disbursed." It also stipulated that the surety's payment records would serve as "prima facie evidence of the fact and amount of the liability."
Ohio Casualty says it formally demanded that the defendants post collateral on or about March 13, 2026. According to the filing, that demand went unanswered.
The surety is now pressing five separate claims, ranging from breach of the indemnity agreement and unjust enrichment to a demand that the court compel the defendants to post the required collateral. Across all counts, Ohio Casualty is seeking at least $3,142,358.00, plus interest, costs, and attorneys' fees.
For insurers and claims teams operating in the surety space, the case is a useful reminder of how indemnity agreements function as the industry's primary safety net - and what happens when that net is tested. When a bonded contractor defaults and the indemnitors go silent, the surety's path to recovery runs straight through the GAI.
The case is Ohio Casualty Insurance Company v. New Style Contractors, Inc. et al., Case No. 1:26-cv-2686, in the United States District Court for the Southern District of New York.
