A Massachusetts construction manager is taking Allianz Global Risks US Insurance Company to court, alleging the insurer refused to defend a $5 million property damage suit.
D.F. Pray, Inc., a regional construction manager, has filed a complaint in the United States District Court for the District of Massachusetts, accusing Allianz of failing to honor its obligations under a commercial general liability policy. The dispute centers on a construction project in Quincy, Massachusetts, where Pray was hired to oversee the development of a seven-story, 171-unit residential building with 15,000 square feet of retail space.
According to the complaint, Pray retained RCM Modulaire, Inc. to fabricate, deliver, and install 135 modular components for the project, with an original contract sum of $8,400,923.44. The subcontract required RCM to secure comprehensive general liability insurance and to name both Pray and the project owner, LBC (a group comprising Hancock Q Plaza LLC, Quincy 1st LLC, and Quincy 2nd LLC), as additional insureds. The insurance was intended to cover claims for property damage or personal injury resulting from RCM’s work.
Problems surfaced after construction was substantially completed on September 18, 2019. LBC reported “problems right after [Pray] completed the job,” including “water damage,” “settlement” of the building, “pipes broken in the building right away as soon as [Pray] finish[ed] the job[,]” and leaks impacting the second floor. On March 3, 2021, LBC formally notified Pray of settlement issues, stating the building had settled “in excess of 2”” causing damage to “piping/fixtures (gas, water, sewer, storm, oil, etc.),” and expressing concern about resulting property damage and loss.
Pray notified RCM and requested that RCM notify its insurance carrier. Pray also notified its own insurer, CNA, which sent a “Notice of Claim Tender of Defense & Indemnity” to Allianz on March 17, 2021, requesting a defense and indemnification for Pray as an additional insured. According to the complaint, Allianz did not respond to the notice or provide a defense.
On or about September 16, 2021, LBC filed the Design Defect Action, alleging that RCM supplied the fabricated modular boxes used to construct the Nova Residences Building, and that the building “had settled in excess of 2” [c]ausing [a] gas leak, along with other property . . .;” and that the “settlement . . . was caused by the negligence of . . . Pray, and/or [its] subcontractors . . .,” including RCM. The Design Defect Action claimed damages in excess of $2 million, and in or around March 2025, LBC increased its claimed damages to approximately $5 million.
Pray alleges Allianz owed a duty to defend Pray under the terms of the policy but refused to provide a defense. Pray claims to have incurred at least $230,000 in legal fees and costs and anticipates at least $250,000 more to complete preparing the case. On July 7, 2025, Pray issued a demand to Allianz pursuant to Massachusetts General Laws Chapter 93A, requesting defense and indemnification for attorneys’ fees and costs incurred. Allianz did not respond until September 5, 2025, when it acknowledged its defense obligation “pursuant to a reservation of rights” but refused to pay any of the costs incurred by Pray.
The complaint asserts causes of action for breach of contract and violation of Massachusetts General Laws Chapters 93A and 176D, alleging Allianz failed to promptly acknowledge and act on Pray’s claim, failed to affirm or deny coverage within a reasonable time, and compelled Pray to institute litigation to recover costs under the policy.
This case is at its early stage and all allegations are unresolved. For insurance professionals, the dispute underscores the risks of delayed responses and the potential regulatory consequences of failing to meet defense obligations in high-value commercial claims.
