Travelers Filed Insurance Lawsuit Over Scaffold Claims
Construction operators should review subcontractor policies to confirm who bears the primary duty to defend claims.
Updated on Oct. 9, 2026 in Construction
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Travelers has initiated a federal lawsuit against Southwest Marine and General Insurance Company to recover over $75,000 in legal defense costs. The dispute stems from a 2017 construction site accident in New York City where a worker fell from a ladder.
Why it matters
This litigation highlights the recurring conflict between project owners and subcontractors over who must provide primary coverage during negligence claims. Operators often face significant out-of-pocket legal expenses when insurers dispute their obligations under specific project contracts.
Travelers is seeking reimbursement for defense costs exceeding $75,000 paid since 2017. The project requirements stipulated minimums of $1 million per occurrence and $2 million in aggregate limits.
The players
Travelers
A global provider of property and casualty insurance products serving commercial and individual clients.
Southwest Marine and General Insurance Company
An insurance carrier specializing in commercial lines and specialty coverage.
The details
Travelers contends that a subcontractor policy should have triggered primary coverage for the project owner and manager following a January 2017 scaffold accident. After Southwest Marine issued a denial letter in September 2017, Travelers stepped in to fund the defense for three entities. The lawsuit now seeks a judicial declaration to force Southwest Marine to satisfy its alleged contractual obligations for the ongoing negligence case.
Timeline
January 19, 2017: A worker fell from a ladder at the construction site.
June 8, 2017: Travelers tendered the defense to Southwest Marine.
September 15, 2017: Southwest Marine issued a denial letter for the tender.
October 8, 2026: Travelers filed the federal complaint in the Eastern District of New York.
Market Landscape
Liability disputes are common under the New York scaffold law, which imposes stringent requirements on project owners and contractors. This lawsuit follows the pattern of insurers litigating the priority of coverage when multiple policies are in effect for a single site.
Project owners should review subcontractor certificates of insurance to verify that their entities are properly named as additional insureds. Consult with your broker to ensure your risk transfer agreements are robust enough to avoid similar reimbursement disputes.
The takeaway
Insurance coverage disputes can linger for nearly a decade, creating long-term financial uncertainty for project owners. Operators should audit their legal defense files annually to identify potential claims that require immediate tender to subcontractor carriers.
Further reading
For more on managing project risks, visit our guide on Construction.
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