Preview
FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020
NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021
TARR TECHNICAL RISKS AGENCY, INC.
November 18, 2019
Joe Sheehan
Managing Director
E.E. Cruz & Company, Inc.
13th
32 Avenue of the Americas, FlOOr
New York, NY 10013
RE: Insured : E.E. Cruz & Company, Inc.
Loss Location : NYSDOT Bridge Project
Saw Mill River Pkwy Site
BIN 719 Bridge; Pier2; Shaft2
Route 987D over the Saw Mill River
: Greensburgh, New York
Type of Loss : Caisson & concrete failed bridge project
Date of Loss : Approx. November 16, 2018
Policy No. : SLSTCON11432617
Claim No. : CON 546
Sedgwick Claim No. : SRT-0515
Dear Mr. Sheehan:
As you are aware, Starr Specialty Lines ("Starr") appointed York Risk Service Group
("York RSG") to investigate the claims submitted by E.E. Cruz & Company ("E.E. Cruz"). Please
be advised that since the inception of this claim, Sedgwick acquired York RSG. While all other
aspects regarding the investigation and reporting of your claim remain the same, the letterhead and
documentation previously stated as York RSG is redefined as Sedgwick for all future and past
communications throughout the balance of the claim process. As you know, E.E. Cruz submitted
a claim for costs associated with designing and installing six micropiles to replace the failed
caisson (the "Claim"). Coverage will be determined by Starr pursuant to the above-referenced all
risks property insurance policy (the "Policy"). The purpose of this letter is to supplement Starr's
June 28, 2019 Reservation of Rights letter, bring your attention to additional relevant Policy
provisions, and provide Starr's position on coverage.
FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020
NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021
Mr. Joe Sheehan
November 12, 2019
Page 2 of 7
In short, itis Starr's position that the Policy would not respond to any portion of the Claim.
First, no covered physical loss or damage has been shown. Second, even ifcovered physical loss
or damage could be shown, exclusions would apply to preclude coverage. We take this opportunity
to explain Starr's position in more detail.
L No Covered Physical Loss or Damage has been Shown
Itis Starr's position that no covered physical loss or damage has been shown. The Claim
was simply submitted for the costs associated with replacing the defective caisson. Therefore, itis
Starr's position that the Policy would not respond to the Claim because the caisson did not sustain
any covered physical loss or damage as defined by the Policy. Starr directs your attention to the
following applicable Policy provisions:
SECTION II - INSURING AGREEMENT
1. INSURING AGREEMENT:
This Policy, subject to the terms, exclusions, limitations and conditions contained
herein or endorsed hereto, insures against all risks of direct physical loss of or
damage to property insured while at the location of the INSURED PROJECT*,
while in offsite temporary storage or while in transit, during Cold Testing, all
within this Policy's territory and occurring during the Period of Insurance of this
Policy.
***
SECTION III - EXCLUSIONS
***
2. PERILS EXCLUDED:
This Policy shall not pay for loss, damage or expense caused by,
resulting from, contributed to or made worse by any ofthe following
excluded perils, all whether direct or indirect, proximate or remote
or in whole or in part caused by, contributed to or aggravated by any
physical loss or damaged insured by this Policy, except as
specifically allowed below:
***
B. COST OF MAKING GOOD
FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020
NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021
Mr. Joe Sheehan
November 12, 2019
Page 3 of 7
***
2. Fault, defect, error, deficiency or omission in design, plan
or specification;
***
Unless direct physical loss or damage by an insured peril
ensues then this Policy will cover for such ensuing loss or
damage only. For the purpose of this Policy and not merely
this exclusion, the property insured, or any portion thereof,
shall not be regarded as damaged solely by virtue of the
existence of any condition stated under 1, 2 or 3 above.
***
Based on the foregoing provisions, the Policy provides coverage for all risks of physical loss or
damage to property. Starr understands that the entirety of the Claim is related to the cost of making
caisson.'
good the defective To that end, the Policy's provision regarding cost of making good
damage."
expressly states that loss resulting solely from fault or defect "shall not be regarded as
Therefore, it isStarr's position that the Policy would not respond to the Insured's claim as there
was no covered damage under the terms and conditions of the Policy.
IL Applicable Exclusions
Even if covered physical loss or damage could be shown, it is Starr's position that the
Policy exclusion for faulty or defective design would apply to preclude coverage. Starr directs
your attention to the following Exclusions section under the Policy:
SECTION III - EXCLUSIONS
***
2. PERILS EXCLUDED:
This Policy shall not pay for loss, damage or expense caused by,
resulting from, contributed to or made worse by any of the following
excluded perils, all whether direct or indirect, proximate or remote
or in whole or in part caused by, contributed to or aggravated by any
1 to the Insurer's thecaisson failed due toitsplacement over undetected
According investigation, ultimately
"fractured geological media". The existence of a fracturelikethisnecessitates betterweight distribution.
FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020
NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021
Mr. Joe Sheehan
November 12, 2019
Page 4 of 7
physical loss or damaged insured by this Policy, except as
specifically allowed below:
***
B. COST OF MAKING GOOD
2. Fault, defect, error, deficiency or omission in design,
plan or specification;
***
Starr's investigation has concluded that due to a large fracture in the bedrock at the specific
location of the shaft, a large void developed around the cement. Due to defects in the caisson's
design and/or installation, E.E. Cruz had to commence the costly remediation project for which it
now claims coverage. Therefore, itis Starr's position that the foregoing Policy exclusion would
apply to preclude coverage for the Claim.
Endorsement"
Furthermore, the "Piling, Sheet Piling & Caisson (the "Endorsement")
would apply to preclude coverage. First, itis Starr's position that the Endorsement's exclusion
for repairing or replacing abandoned or damaged caissons would apply to preclude coverage. Starr
directs your attention to the following provision of the Endorsement:
PILING, SHEET PILING & CAISSON ENDORSEMENT
When coverage is provided on caissons, piling and sheet
piling, the Company shall not be liable for:
***
1. Replacing, repairing, realigning or rectifying casings,
piles or sheet piles . . . Which are abandoned or
damaged during installation or extraction;
***
Starr's investigation has revealed that the caisson was abandoned and then replaced with an
alternate design. When E.E. Cruz first discovered voids in the caisson, E.E. Cruz replaced the
unusable caisson with an alternative support structure consisting of six micropiles. Therefore, it
is Starr's position that the Endorsement precludes coverage of repairing or replacing abandoned
or damaged caissons and would apply to preclude coverage for the Claim.
FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020
NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021
Mr. Joe Sheehan
November 12, 2019
Page 5 of 7
Additionally, it is Starr's position that the Endorsement's exclusion for rectifying any
leakage would also apply to preclude coverage. Starr directs your attention to the following
provision of the Endorsement:
PILING, SHEET PILING & CAISSON ENDORSEMENT
When coverage is provided on caissons, piling and sheet
piling, the Company shall not be liable for:
***
2. Rectifying any leakage or material infiltration of any
kind.
***
According to Starr's investigation, the loss of concrete was due a combination of a porous rock
bed and water entering the caisson's shaft. This resulted in portions of the uncured concrete
leaking out of the shaft resulting in a void. As a result, the caisson needed replacement. Therefore,
itis Starr's position that the Endorsement's exclusion for rectifying any leakage would also apply
to preclude coverage of the Claim.
Lastly, it isStarr's position that the Endorsement's exclusion for the caisson's failure to
reach design load capacity would also apply to preclude coverage. Starr directs your attention to
the following section of the Endorsement to the Policy:
PILING, SHEET PILING & CAISSON ENDORSEMEE
When coverage is provided on caissons, piling and sheet
piling, the Company shall not be liable for:
***
3. Failure to reach design load bearing capacity or to pass
load bearing tests or damage or destruction as a result
of load bearing tests.
***
FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020
NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021
Mr. Joe Sheehan
November 12, 2019
Page 6 of 7
According to information provided by E.E. Cruz, testing revealed voids in the bottom of the shaft,
which prevented the caisson from reaching its design load bearing capacity. Due to this failure,
E.E. Cruz was forced to incur costs to design and construct six micropiles to replace the failed
caisson. Therefore, it isStarr's position that the Endorsement exclusion for failure to reach load
bearing capacity would apply to preclude E.E. Cruz's claim.
IV. Conclusion
We trust that this information sufficiently explains Starr's position regarding E.E. Cruz's
claim. Please state whether you agree or disagree with Starr's position as set forth in this
letter. If you disagree, please explain why and state your position. If you have any further
documentation or information you would like Starr to consider, please forward it to our
attention. Starr request a response to this letter within thirty (30) da
Starr reserves allrights regarding the application of the above-referenced provisions under
the terms and conditions of the Policy. Additionally, other Policy provisions may be found to be
applicable after further investigation or analysis, and no waiver of any Policy provisions,
conditions, limitations or exclusions is intended or implied by our citation of the above provisions.
Thus, reference to the above-listed Policy provisions isnot intended to be an all-inclusive recitation
of defenses that may apply. Nor is reference to the above-listed Policy provisions a declaration of
Starr's intent to decline coverage on this basis. Rather, Starr having made no determination on
coverage at this stage, are merely utilizing this opportunity to advise you of potentially applicable
Policy provisions in a complete reservation of rights.
Starr expressly reserves its rights under the Policy and at law and will continue its
investigation and defense under a reservation of all of itsrights. Neither this letter nor any other
further communications or investigation are intended to,nor shall they be deemed as, a waiver or
estoppel to assert any such rights Starr may have. Additional investigation may provide other
information bearing on the questions of coverage, and Starr may choose to rely on such other
information as additional grounds to accept or deny coverage.
Finally, please note that the only authorized communication concerning coverage in this
matter are those set forth in writing signed by Starr or in a letter stating Starr has authorized the
coverage communication. As independent adjusters, Sedgwick does not have authority to interpret
Starr's policy or to bind it to coverage. Rather, Sedgwick is responsible for gathering and
confirming factual information sufficient to permit Starr to evaluate whether coverage is afforded
under its policies and to ascertain the amounts that are claimed and can be supported. Starr has
authorized this coverage communication.
If you have any questions or concerns, please do not hesitate to contact the undersigned.
FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020
NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021
Mr. Joe Sheehan
November 12, 2019
Page 7 of 7
Very truly yours,
Nicholas Lee
Cc: Rodney Herald AIC, CIC
McGriff, Seibels & Williams, Inc.
RHerald@McGriff.com
Preview
FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020 NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021 TARR TECHNICAL RISKS AGENCY, INC. November 18, 2019 Joe Sheehan Managing Director E.E. Cruz & Company, Inc. 13th 32 Avenue of the Americas, FlOOr New York, NY 10013 RE: Insured : E.E. Cruz & Company, Inc. Loss Location : NYSDOT Bridge Project Saw Mill River Pkwy Site BIN 719 Bridge; Pier2; Shaft2 Route 987D over the Saw Mill River : Greensburgh, New York Type of Loss : Caisson & concrete failed bridge project Date of Loss : Approx. November 16, 2018 Policy No. : SLSTCON11432617 Claim No. : CON 546 Sedgwick Claim No. : SRT-0515 Dear Mr. Sheehan: As you are aware, Starr Specialty Lines ("Starr") appointed York Risk Service Group ("York RSG") to investigate the claims submitted by E.E. Cruz & Company ("E.E. Cruz"). Please be advised that since the inception of this claim, Sedgwick acquired York RSG. While all other aspects regarding the investigation and reporting of your claim remain the same, the letterhead and documentation previously stated as York RSG is redefined as Sedgwick for all future and past communications throughout the balance of the claim process. As you know, E.E. Cruz submitted a claim for costs associated with designing and installing six micropiles to replace the failed caisson (the "Claim"). Coverage will be determined by Starr pursuant to the above-referenced all risks property insurance policy (the "Policy"). The purpose of this letter is to supplement Starr's June 28, 2019 Reservation of Rights letter, bring your attention to additional relevant Policy provisions, and provide Starr's position on coverage. FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020 NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021 Mr. Joe Sheehan November 12, 2019 Page 2 of 7 In short, itis Starr's position that the Policy would not respond to any portion of the Claim. First, no covered physical loss or damage has been shown. Second, even ifcovered physical loss or damage could be shown, exclusions would apply to preclude coverage. We take this opportunity to explain Starr's position in more detail. L No Covered Physical Loss or Damage has been Shown Itis Starr's position that no covered physical loss or damage has been shown. The Claim was simply submitted for the costs associated with replacing the defective caisson. Therefore, itis Starr's position that the Policy would not respond to the Claim because the caisson did not sustain any covered physical loss or damage as defined by the Policy. Starr directs your attention to the following applicable Policy provisions: SECTION II - INSURING AGREEMENT 1. INSURING AGREEMENT: This Policy, subject to the terms, exclusions, limitations and conditions contained herein or endorsed hereto, insures against all risks of direct physical loss of or damage to property insured while at the location of the INSURED PROJECT*, while in offsite temporary storage or while in transit, during Cold Testing, all within this Policy's territory and occurring during the Period of Insurance of this Policy. *** SECTION III - EXCLUSIONS *** 2. PERILS EXCLUDED: This Policy shall not pay for loss, damage or expense caused by, resulting from, contributed to or made worse by any ofthe following excluded perils, all whether direct or indirect, proximate or remote or in whole or in part caused by, contributed to or aggravated by any physical loss or damaged insured by this Policy, except as specifically allowed below: *** B. COST OF MAKING GOOD FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020 NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021 Mr. Joe Sheehan November 12, 2019 Page 3 of 7 *** 2. Fault, defect, error, deficiency or omission in design, plan or specification; *** Unless direct physical loss or damage by an insured peril ensues then this Policy will cover for such ensuing loss or damage only. For the purpose of this Policy and not merely this exclusion, the property insured, or any portion thereof, shall not be regarded as damaged solely by virtue of the existence of any condition stated under 1, 2 or 3 above. *** Based on the foregoing provisions, the Policy provides coverage for all risks of physical loss or damage to property. Starr understands that the entirety of the Claim is related to the cost of making caisson.' good the defective To that end, the Policy's provision regarding cost of making good damage." expressly states that loss resulting solely from fault or defect "shall not be regarded as Therefore, it isStarr's position that the Policy would not respond to the Insured's claim as there was no covered damage under the terms and conditions of the Policy. IL Applicable Exclusions Even if covered physical loss or damage could be shown, it is Starr's position that the Policy exclusion for faulty or defective design would apply to preclude coverage. Starr directs your attention to the following Exclusions section under the Policy: SECTION III - EXCLUSIONS *** 2. PERILS EXCLUDED: This Policy shall not pay for loss, damage or expense caused by, resulting from, contributed to or made worse by any of the following excluded perils, all whether direct or indirect, proximate or remote or in whole or in part caused by, contributed to or aggravated by any 1 to the Insurer's thecaisson failed due toitsplacement over undetected According investigation, ultimately "fractured geological media". The existence of a fracturelikethisnecessitates betterweight distribution. FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020 NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021 Mr. Joe Sheehan November 12, 2019 Page 4 of 7 physical loss or damaged insured by this Policy, except as specifically allowed below: *** B. COST OF MAKING GOOD 2. Fault, defect, error, deficiency or omission in design, plan or specification; *** Starr's investigation has concluded that due to a large fracture in the bedrock at the specific location of the shaft, a large void developed around the cement. Due to defects in the caisson's design and/or installation, E.E. Cruz had to commence the costly remediation project for which it now claims coverage. Therefore, itis Starr's position that the foregoing Policy exclusion would apply to preclude coverage for the Claim. Endorsement" Furthermore, the "Piling, Sheet Piling & Caisson (the "Endorsement") would apply to preclude coverage. First, itis Starr's position that the Endorsement's exclusion for repairing or replacing abandoned or damaged caissons would apply to preclude coverage. Starr directs your attention to the following provision of the Endorsement: PILING, SHEET PILING & CAISSON ENDORSEMENT When coverage is provided on caissons, piling and sheet piling, the Company shall not be liable for: *** 1. Replacing, repairing, realigning or rectifying casings, piles or sheet piles . . . Which are abandoned or damaged during installation or extraction; *** Starr's investigation has revealed that the caisson was abandoned and then replaced with an alternate design. When E.E. Cruz first discovered voids in the caisson, E.E. Cruz replaced the unusable caisson with an alternative support structure consisting of six micropiles. Therefore, it is Starr's position that the Endorsement precludes coverage of repairing or replacing abandoned or damaged caissons and would apply to preclude coverage for the Claim. FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020 NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021 Mr. Joe Sheehan November 12, 2019 Page 5 of 7 Additionally, it is Starr's position that the Endorsement's exclusion for rectifying any leakage would also apply to preclude coverage. Starr directs your attention to the following provision of the Endorsement: PILING, SHEET PILING & CAISSON ENDORSEMENT When coverage is provided on caissons, piling and sheet piling, the Company shall not be liable for: *** 2. Rectifying any leakage or material infiltration of any kind. *** According to Starr's investigation, the loss of concrete was due a combination of a porous rock bed and water entering the caisson's shaft. This resulted in portions of the uncured concrete leaking out of the shaft resulting in a void. As a result, the caisson needed replacement. Therefore, itis Starr's position that the Endorsement's exclusion for rectifying any leakage would also apply to preclude coverage of the Claim. Lastly, it isStarr's position that the Endorsement's exclusion for the caisson's failure to reach design load capacity would also apply to preclude coverage. Starr directs your attention to the following section of the Endorsement to the Policy: PILING, SHEET PILING & CAISSON ENDORSEMEE When coverage is provided on caissons, piling and sheet piling, the Company shall not be liable for: *** 3. Failure to reach design load bearing capacity or to pass load bearing tests or damage or destruction as a result of load bearing tests. *** FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020 NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021 Mr. Joe Sheehan November 12, 2019 Page 6 of 7 According to information provided by E.E. Cruz, testing revealed voids in the bottom of the shaft, which prevented the caisson from reaching its design load bearing capacity. Due to this failure, E.E. Cruz was forced to incur costs to design and construct six micropiles to replace the failed caisson. Therefore, it isStarr's position that the Endorsement exclusion for failure to reach load bearing capacity would apply to preclude E.E. Cruz's claim. IV. Conclusion We trust that this information sufficiently explains Starr's position regarding E.E. Cruz's claim. Please state whether you agree or disagree with Starr's position as set forth in this letter. If you disagree, please explain why and state your position. If you have any further documentation or information you would like Starr to consider, please forward it to our attention. Starr request a response to this letter within thirty (30) da Starr reserves allrights regarding the application of the above-referenced provisions under the terms and conditions of the Policy. Additionally, other Policy provisions may be found to be applicable after further investigation or analysis, and no waiver of any Policy provisions, conditions, limitations or exclusions is intended or implied by our citation of the above provisions. Thus, reference to the above-listed Policy provisions isnot intended to be an all-inclusive recitation of defenses that may apply. Nor is reference to the above-listed Policy provisions a declaration of Starr's intent to decline coverage on this basis. Rather, Starr having made no determination on coverage at this stage, are merely utilizing this opportunity to advise you of potentially applicable Policy provisions in a complete reservation of rights. Starr expressly reserves its rights under the Policy and at law and will continue its investigation and defense under a reservation of all of itsrights. Neither this letter nor any other further communications or investigation are intended to,nor shall they be deemed as, a waiver or estoppel to assert any such rights Starr may have. Additional investigation may provide other information bearing on the questions of coverage, and Starr may choose to rely on such other information as additional grounds to accept or deny coverage. Finally, please note that the only authorized communication concerning coverage in this matter are those set forth in writing signed by Starr or in a letter stating Starr has authorized the coverage communication. As independent adjusters, Sedgwick does not have authority to interpret Starr's policy or to bind it to coverage. Rather, Sedgwick is responsible for gathering and confirming factual information sufficient to permit Starr to evaluate whether coverage is afforded under its policies and to ascertain the amounts that are claimed and can be supported. Starr has authorized this coverage communication. If you have any questions or concerns, please do not hesitate to contact the undersigned. FILED: NEW YORK COUNTY CLERK 01/12/2021 02:37 PM INDEX NO. 652321/2020 NYSCEF DOC. NO. 20 RECEIVED NYSCEF: 01/12/2021 Mr. Joe Sheehan November 12, 2019 Page 7 of 7 Very truly yours, Nicholas Lee Cc: Rodney Herald AIC, CIC McGriff, Seibels & Williams, Inc. RHerald@McGriff.com