Sewage Plant Owners Sue Insurance Company

The owners of the Binghamton-Johnson City Joint Sewage Treatment Plant filed a lawsuit against American Alternative Insurance Corporation.  The owners are seeking more than $3.5 million and allege that the insurance company denied coverage for the collapse of one of the plant’s walls.  After the wall’s collapse, the inability to immediately use the insurance funds to replace the wall further damaged their reputation, plant and trust from the plant’s work force.

AAIC denied coverage because they determined it was a result of a faulty design, which is not covered under the policy.  The plaintiff’s and defendant’s engineers differ over the reason for the collapse and, thus, who should pay for it.  Additionally, AAIC claims that the sewage board knew of the structural problems when the policy took effect.  The owners are suing the builders as well in order to ensure they get their compensation from somewhere.