Old Republic Insurance Company is chasing more than $435,000 from a New York contractor and its principals after a state project went off the rails.
On August 4, 2025, Old Republic filed a lawsuit in the Eastern District of New York, naming I&A Renovation, Inc., along with Khurram R. Khan and Fauzia K. Ghauri, as defendants. The insurer says it’s out hundreds of thousands of dollars after stepping in to finish a job at the Olean Armory - a job that, according to Old Republic, was supposed to be handled by I&A but ended up in a tangle of missed deadlines, quality issues, and even an asbestos scare.
Here’s how it unfolded, according to Old Republic’s complaint. The insurer issued two surety bonds, each worth $552,000, to back I&A’s contract with the New York State Office of General Services for a renovation project at the Olean Armory. To get those bonds, I&A and its principals signed an indemnity agreement in February 2022, promising to cover any losses or legal costs Old Republic might face if things went wrong.
Things did go wrong. I&A started work in May 2022, but soon ran into trouble with the state over the quality of work, missed deadlines, and paperwork problems. By late September 2023, the state pulled the plug on I&A and called on Old Republic to step in. Old Republic brought in a consultant, Cashin, Spinelli & Ferretti, to help sort things out.
In February 2024, Old Republic and the state agreed that the insurer would take over the job. They even gave I&A another shot, letting them finish the work as an independent contractor under Old Republic’s watch. But the problems didn’t stop. Old Republic says I&A kept missing meetings, failed to fix mistakes, and at one point, caused an asbestos release that needed remediation.
After months of back-and-forth, Old Republic finally terminated I&A for good in April 2025. The insurer then hired RP Oak Hill Building Company to finish the project for $328,700. By Old Republic’s math, after accounting for what the state had already paid out, there was still a shortfall of nearly $200,000 just to get the job done. Add in over $218,000 in consultant fees and almost $17,000 in legal expenses, and Old Republic says its total losses have hit at least $435,259—and could climb higher.
The heart of Old Republic’s case is the indemnity agreement, which the insurer says clearly requires I&A and its principals to pay up for any claims, demands, or legal expenses tied to the bonds. Despite repeated demands, Old Republic says it hasn’t seen a dime from I&A or the individuals who signed the agreement.
It’s important to remember that these are Old Republic’s allegations, not established facts. The defendants haven’t yet had their say in court, and the outcome is still up in the air.
For insurance professionals, especially those working with surety bonds and construction risks, this case is a reminder of how quickly a project can go sideways - and how crucial it is to have strong indemnity agreements in place. The numbers are big, the stakes are high, and the lessons are clear: when a contractor defaults, the insurer can end up holding the bag, and the paperwork behind those bonds really matters.
