Travelers and Nautilus face off in federal court over who must pick up the tab for defending and indemnifying additional insureds in a multimillion-dollar New York construction injury suit.
Travelers Casualty Insurance Company of America has launched a lawsuit against Nautilus Insurance Company in the US District Court for the Southern District of New York, alleging that Nautilus has failed to defend and indemnify several real estate and development entities in a personal injury case stemming from a Yonkers construction project.
At the heart of the dispute is a workplace accident. On June 29, 2019, Sandra Carneiro Barbosa, an employee of Nationwide Mechanical Inc. (NMI), alleges she was caused to fall “upon a hazardous opening” at the Avalon Yonkers construction site at 79 Alexander Street, resulting in injury to her right ankle and lumbar spine. Barbosa seeks special damages of at least $405,000, and has named Avalon Yonkers ATI Site, LLC, Avalon Yonkers Sun Sites, LLC, AvalonBay Communities, Inc., and the Yonkers Industrial Development Agency as defendants in her lawsuit, asserting claims based on negligence and alleged violations of New York Labor Law.
Travelers, which issued a liability insurance policy to NM&P, states it has been providing and continues to provide a defense for Avalon Yonkers ATI Site, LLC, Avalon Yonkers Sun Sites, LLC, AvalonBay Communities, Inc., and the Yonkers Industrial Development Agency in the underlying action. Travelers contends that Nautilus, which issued a liability insurance policy to NMI, is obligated to provide primary and non-contributory coverage to these entities as additional insureds—an obligation Travelers alleges Nautilus has not fulfilled.
The complaint cites an endorsement in the Nautilus policy, which, according to Travelers, provides that additional insured status extends to “any person or organization that you are required by written contract or agreement to include as an additional insured.” The endorsement further states that “the coverage provided hereunder shall be primary and not contributing with any other insurance available to those person(s) or organization(s) shown in the schedule above.”
The Trade Contract between Avalon Yonkers ATI Site, LLC and Avalon Yonkers Sun Sites, LLC (as Owner) and NMI (as Contractor), dated May 4, 2018, required NMI to procure and maintain insurance naming the Owner, their officers, directors, employees, and any other party the Owner reasonably requires, as additional insureds, with coverage that is primary and non-contributory. The complaint details that Travelers made repeated tenders and retenders of the defense and indemnity of Avalon Yonkers ATI Site, LLC, Avalon Yonkers Sun Sites, LLC, AvalonBay Communities, Inc., and Yonkers Industrial Development Agency as additional insureds to Nautilus, including by correspondence dated August 30, 2021; November 19, 2021; December 1, 2021; February 17, 2022; September 12, 2022; April 25, 2025; June 1, 2025; July 16, 2025; July 28, 2025; and August 28, 2025. According to the complaint, Nautilus has not responded to these tenders and has refused to provide a defense or indemnification under the Nautilus policy.
Travelers seeks a judicial declaration that Nautilus is obligated to defend and indemnify Avalon Yonkers ATI Site, LLC, Avalon Yonkers Sun Sites, LLC, AvalonBay Communities, Inc., and Yonkers Industrial Development Agency as additional insureds under the Nautilus policy, and that the coverage provided by Nautilus is primary and non-contributory to any coverage provided by Travelers. Travelers also seeks reimbursement for all defense costs incurred and continues to incur in defending these entities in the underlying action, plus applicable interest.
The complaint alleges that the coverages provided to Avalon Yonkers ATI Site, LLC, Avalon Yonkers Sun Sites, LLC, AvalonBay Communities, Inc., and Yonkers Industrial Development Agency under the Nautilus policy are primary and that the obligations of Travelers are excess to proper exhaustion and full payment of the limits of the Nautilus policy.
