A major surety showdown is brewing in Minnesota, where Nationwide Mutual Insurance Company is chasing more than $426,000 from a contractor and its owners over unpaid public works claims.
Filed on August 28, 2025, in the US District Court for the District of Minnesota, the lawsuit puts a spotlight on the real-world risks insurers face when contractors fall short on their promises. Nationwide says it stepped in as surety for ACM, L.L.C., a Minnesota-based contractor, and its principals, Nicholas and Kristen Alderink, after the company took on several public projects across the state. The insurer claims it’s now left holding the bag for hundreds of thousands of dollars in payments to subcontractors and suppliers.
Here’s how it all unfolded, according to Nationwide’s complaint. Back in May 2023, ACM and its owners signed a General Agreement of Indemnity. That’s the kind of contract that’s supposed to make sure the insurer gets paid back if it has to cover any losses on behalf of the contractor. Nationwide then issued a series of performance and payment bonds for ACM’s projects, including work in Hibbing, Anoka, Floodwood, Mora, Milaca, and the Buffalo-Red River Watershed District.
But things didn’t go as planned. Nationwide says it started getting claims from subcontractors and suppliers who hadn’t been paid for their work on these projects. The insurer ended up paying out $713,925.99 to satisfy those claims. After collecting $456,786.30 in bonded contract funds and $13,000 in indemnity reimbursements, Nationwide says it’s still out $244,139.69 - and that’s not even counting attorney’s fees and costs.
The trouble didn’t stop there. In November 2024, Nationwide demanded $325,000 in collateral from ACM and the Alderinks, as allowed under their agreement. When that didn’t happen, the insurer made another demand in August 2025, this time for $426,609. Still no payment, Nationwide says, and the exposure keeps growing. The company points to open claims on the Floodwood and Stony Creek projects, including a $251,550 claim from the City of Floodwood for missed deadlines and liquidated damages.
Nationwide’s complaint makes it clear: without the collateral it bargained for, the insurer says it faces “imminent harm” and “irreparable injury.” The company wants the court to order the contractor and its owners to put up the money and cover all losses, plus attorney’s fees.
While these are Nationwide’s claims - and the defendants haven’t yet had their say in court - the case is a strong reminder for anyone in the surety business. When contractors sign on the dotted line, those indemnity and collateral promises aren’t just paperwork. For insurers, enforcing those agreements can mean the difference between a manageable risk and a costly headache.
As the case moves forward, insurance professionals across the country will be watching closely. The outcome could shape how sureties handle indemnity and collateral demands in the future, especially as public project work continues to ramp up. For now, it’s a waiting game, but the stakes are high for everyone involved.
