An appeals court has ruled that a New York construction firm will receive $10.7 million – plus interest – against two Kemper-affiliated insurers that failed to indemnify and defend the company when a subcontractor accidentally touched off a blaze that destroyed a Manhattan synagogue in 1998. The U.S Court of Appeals for the Second Circuit upheld a decision by the U.S. District Court in New York. The Lower Court ruled that Turner Construction was covered by liability insurance policies issued to the subcontractor, Trident Mechanical Systems, by American Manufacturers Mutual Insurance Co. (AMMIC) and Lumbermens Mutual Casualty Co. (LMCC)
The background of the original law is very interesting. A fire at Manhattan’s Central Synagogue destroyed a building, which was revered as one of the city’s architectural landmarks. It took three years to rebuild the synagogue, which re-opened in September 2001.
The Appeals Court decision means that LMCC — Trident’s excess insurer — will pay $9.75 million and AMMC will pay $945,000 to resolve the case. The decision also includes pre-judgment interest of 9% per year. The court also upheld the U.S. District Court’s ruling that the companies breached their duties to defend Turner in the case and that the construction company was therefore entitled to recoup reasonable attorneys’ fees and legal costs.
Source: Insurance Journal
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