Central Texas Highway Constructors, LLC (CTHC) secured a contract with Developers to design and construct a 41-mile stretch of highway in Texas. CTHC hired Archer Western Contractors, Ltd. (Archer Western) along with other companies as subcontractors. Archer Western named CTHC as an “additional insured” to its general liability insurance policy with Arch Insurance Company (Arch). Five years after the joint project finished, the developer requested arbitration against CTHC for errors in the design and construction of the highway that caused the pavement to fail before the road opened to the public. In their claims, the developers highlighted erosion problems that directly related to the work of Archer Western. CTHC’s insurer Zurich American Insurance Company (Zurich) invoked Arch’s duty to defend CTHC. Arch refused, and Zurich sued. 

The district court referred the two parties' request for summary judgment to a magistrate judge who granted Arch’s motion for summary judgment. Zurich appealed. The Fifth Circuit Court of Appeals summed up the case in one question: Do the Developer’s claims against CTHC in the underlying arbitration potentially implicate Archer Western’s drainage system work, such that Archer Western’s insurer (Arch) owes a duty to defend the additional insured (CTHC)? Read the full case here.

The attorneys at Webb Sanders & Williams have experience resolving insurance disputes for both the insurer and their insured. If you need assistance regarding an insurance case, contact our office at 662-844-2137or by fax at 662-842-3863.