A $420,000 insurance battle over a collapsed Arkansas home build is putting Zurich’s “collapse” coverage under the microscope in a case filed August 29, 2025.
Here’s what happened: Byrd Dozer Services, an Arkansas corporation, was building a one-family structure in Fort Smith when, on July 8, 2025, the ground beneath the house gave way. The complaint says the earthen substrate under the slab “caved,” causing the slab, the structure, and the attached porch to fall and break apart. Byrd Dozer describes the result as a total loss, with the home and its porch collapsing and the project stopping immediately.
Byrd Dozer says it had an insurance policy from Zurich American Insurance Company, a Stock Company, which, according to the complaint, provided insurance for damage to a home under construction, including “Additional Coverage” for “collapse.” The complaint states that Zurich’s policy covers “direct physical loss or damage to Covered Property caused by collapse of a building or any part of a building.” Byrd Dozer claims the policy does not require a special insured structure endorsement for this coverage to apply.
Zurich, according to Byrd Dozer’s complaint, denied the claim both orally and in writing. The complaint says Zurich’s representatives, including Young and Associates, inspected the site between August 22 and 25, 2025, about 28 days after the initial written notification. Byrd Dozer alleges Zurich issued a written denial after Byrd Dozer’s written demand for coverage.
The complaint claims Zurich’s denial was a breach of contract. Byrd Dozer is seeking damages in excess of $420,000, plus interest, fees, and costs. The company is also asking for a declaratory judgment that Zurich’s policy provides coverage for the loss, as well as attorney’s fees and a 12% penalty under Arkansas law.
The policy clauses at issue, as described in the complaint, include “Additional Coverage” for collapse and coverage for “loss to a building or part of a structure” if caused by collapse during construction, due to hidden decay, insect or vermin damage, weight of contents, equipment, people, or defective material or methods during construction, if the collapse occurs during construction.
At this stage, all facts are based on Byrd Dozer’s allegations in the complaint. The court has not issued a decision, and Zurich’s detailed response is not included in the complaint.
For insurance professionals, the case offers a close look at how “collapse” and “Additional Coverage” language in commercial property policies may be interpreted when a structure under construction fails. As the case proceeds in federal court, many in the industry will be watching to see how the court addresses these coverage questions and what it could mean for similar claims in the future.
