Zurich American and Colonial American are being sued for over $193,000 in a payment bond dispute tied to a federal construction project in Texas.
Martin Specialty Coatings, a Louisiana-based subcontractor, filed the claim on July 8 in the US District Court for the Eastern District of Texas. The suit alleges Zurich and Colonial failed to pay the balance owed under a bond they issued for a US Army construction project at the Red River Army Depot in Texarkana.
This isn’t a policy dispute. It’s a straight-up surety bond issue. Under the federal Miller Act, contractors on public works must post payment bonds to ensure subcontractors and suppliers get paid - even if the general contractor doesn’t pay up. That’s the core of this case.
Back in September 2020, a joint venture named AMES 1/HWH JV, LLC secured a contract with the US Army Corps of Engineers to handle demolition and new construction at the depot. As required by law, AMES furnished a bond - number 9191498 / PRF9355430 - backed by Zurich and Colonial.
Martin came on board a few months later. On or around December 10, 2020, the company signed a first-tier subcontract with AMES to perform painting services on the project. By November 25, 2024, Martin says it had completed all work under the agreement. The contract value, including change orders, was $1,123,500.
But the company says it never got the final check. According to the complaint, AMES paid $929,975.30, leaving a shortfall of $193,524.70. Martin says it submitted several payment demands, including a formal letter sent on January 2, 2025, well within the Miller Act’s 90-day notice window.
When those demands were ignored, Martin turned to the bond - and by extension, to Zurich and Colonial. The company is now suing both sureties for the unpaid balance, plus interest, attorneys’ fees, and costs.
The case doesn’t touch on policy clauses or broader insurance practices. Instead, it highlights the bond obligations insurers take on in the federal construction space - a narrow, technical line of business where stakes still run high. With many large commercial projects funded by the government, the risk exposure in bond enforcement isn’t small change.
