Lawsuit Filed Against AIG Over Wrongful Denial of Coverage for Construction Incident

Two construction companies have filed a lawsuit against AIG, accusing the insurer of wrongful denial of coverage after an incident at a Texas construction site. The case involves a cement truck accident that injured a worker, raising significant questions about insurance coverage terms and conditions.

On June 15, 2026, Sundt/Kiewit (SKJV) initiated legal action in the Southern District of Texas against American International Group and National Union Fire Insurance Company of Pittsburgh, Pennsylvania. According to the complaint, these insurance carriers allegedly denied coverage to SKJV as an additional insured under Tex Mix Partners, operating as Tex-Mix Concrete.

The dispute centers around the Blue Sky Water Reclamation Facility project in Taylor, Texas, where SKJV contracted Tex-Mix for grout supply. SKJV required Tex-Mix to secure commercial auto insurance, listing SKJV as an additional insured party. The incident occurred on November 8, 2022, involving a Tex-Mix employee allegedly hitting worker Robert Searles with a cement truck.

Key to the dispute are timing and the nature of agreements, as SKJV claims a verbal agreement with Tex-Mix existed before the incident, later formalized in writing on December 5, 2022. The endorsement in question, form number 87950 (9/14), is interpreted by SKJV to include entities as additional insureds under any contract or agreement, though the policy lacks specific definitions for "contract" or "agreement."

SKJV requested defense and indemnification from the insurers on June 18, 2024, and reiterated the request on December 9, 2024. The insurers allegedly breached the policy by refusing to defend a claim potentially covered. The lawsuit seeks a declaratory judgment and breach of contract compensation of at least $2 million, along with legal fees.

For professionals in the insurance industry, this case highlights the complexities of additional-insured status recognition and agreement timing. The outcome may hinge on whether an oral agreement qualifies as a contract under the applicable policy endorsements. As of now, AIG and National Union have not responded, and the claims remain unresolved in court.