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Federal Court in Alaska Holds Insurer Liable Under E&O Policy to Indemnify and Defend Construction Manager for Claims by Subcontractor That Construction Manager Failed to Properly Perform Construction Management Services

KICC -Alcan Gen. v. Crum & Forster Specialty Ins. Co., 2017 U.S. Dist. LEXIS 37560 (March 16, 2017)

Author: John H. Conrad

5/18/2017

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Federal Court in Alaska Holds Insurer Liable Under E&O Policy to Indemnify and Defend Construction Manager for Claims by Subcontractor That Construction Manager Failed to Properly Perform Construction Management Services

A Contractor/Construction Manager, KICC-Alcan General (KICC), entered into a subcontract with an MEP subcontractor, Superior Group (Superior), concerning the construction of two buildings at an airforce base in Alaska. Superior sued KICC for approximately $2 million in costs it incurred in excess of the contract value, allegedly caused by KICC’s failure to properly manage the project. KICC tendered Superior’s claims to its Errors and Omissions insurance carrier, Crum & Forster Specialty Insurance Company (C&F). C&F denied both defense and indemnity of Superior’s claims. KICC settled its claims with Superior prior to trial. KICC then sued C&F for its breach of the duty to defend and indemnify against Superior’s claims, as well as a breach of its duty of good faith.