In January of 2011, 10 ACE Group Companies agreed to pay $70 million in settlement fees to the New York Workers’ Compensation Board after an investigation into whether certain insurance companies had been overcharging policyholders.
ACE Unit Sues Clients to Recoup Surety Bond Payout
The ACE Group unit sued EnviroGuard LLC in U.S. District Court in Connecticut in a bid to recover $147,653.42. Also named as defendants were Clean Air Consultants LLC, Silvermine Equities LLC, Mark Costantini and Lisa Costantini, and Mario and Michelle Marini.
EnviroGuard, specializes in the removal of asbestos and lead from buildings. It is based in Seymour, Connecticut.
Westchester executed surety performance bonds for EnviroGuard and Clean Air on October 15th, 2010. There was no indication about a specific contract that the bonds were tied to other than for construction projects.
At some point after issuance of the bonds, a claim was submitted against them. As a result of that action, Westchester paid $134,467 to an unnamed claimant.
Westchester then cited a provision of the surety bond whereby the indemnitors - the defendants - agreed to indemnify the insurer for any amount that it paid out. This clause states that “principals and indemnitors shall exonerate, hold harmless, indemnify and keep indemnified Surety (Westchester) from and against any and all claims, demands and liabilities for losses, costs, expenses of whatsoever kind or nature.” The company further noted that the defendants were obliged to indemnify it as soon as a liability existed or was asserted against Westchester.
In addition to the surety bond payout, Westchester said it also has incurred legal and other expenses amounting to $13,467. It asked the court to include that amount as well, plus any future loss, costs, fees or expenses incurred.
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