Liberty Mutual has hauled three insurers into federal court, claiming all three refused to cover Krispy Kreme's defense in a Bronx construction injury case.
The suit, filed on March 2 in the US District Court for the Southern District of New York, pits Liberty Mutual Fire Insurance Company against Travelers Indemnity Company of America, New York Marine and General Insurance Company, and State National Insurance Company. At the heart of the dispute is a question construction insurance professionals encounter regularly: when multiple policies cover the same parties as additional insureds, which carrier pays first?
According to the filing, the coverage fight stems from an October 2019 incident at a commercial property at 535 Zerega Avenue in the Bronx, where a mechanic named Manuel Jimenez, employed by Advanced Plumbing Mechanical & Sprinklers Corp., claims he fell from a height and suffered bodily injury. Jimenez sued CJSA Realty LLC and Krispy Kreme Doughnut Corporation, among others, asserting claims under New York Labor Law Sections 240 and 241(6) -- statutes that can impose significant liability on property owners and contractors for gravity-related construction site injuries.
Krispy Kreme had contracted with The Sweet Construction Group as general contractor for the project. Sweet Construction then subcontracted concrete and masonry work to OSD Construction LLC and plumbing and sprinkler work to Advanced Plumbing. The filing states that each subcontract required the subcontractor to carry commercial general liability insurance naming Krispy Kreme, CJSA, and Sweet Construction as additional insureds, on a primary and non-contributory basis.
Liberty Mutual, which issued a CGL policy to Krispy Kreme, maintains that its coverage is excess -- sitting behind policies issued by Travelers to OSD, NY Marine to Sweet Construction, and State National to Advanced Plumbing. Each of those policies, according to the filing, contains additional insured endorsements and primary-and-non-contributory provisions that should have placed them ahead of Liberty Mutual's coverage.
Liberty Mutual claims that none of the three carriers accepted the obligation. The filing alleges that tenders were made to Travelers and NY Marine as early as October 2021, with, according to the filing, neither carrier issuing a written response. State National's third-party administrator reportedly denied coverage in January 2022, taking the position that additional insured status would not apply until a determination was made that the injury was caused by its policyholder's work. Travelers denied coverage in January 2024.
Liberty Mutual now seeks declaratory judgments that all three defendant policies are primary to its own, along with monetary judgments for the defense costs it claims to have shouldered in the interim.
No court has made any determination on the merits. The allegations reflect only Liberty Mutual's position as stated in its filing. But the case spotlights a persistent and expensive pattern in construction insurance -- subcontracts that demand primary coverage, policies that arguably provide it, and carriers that decline the call, leaving another insurer to carry the load while the fight plays out in court.
