New York's Supreme State Court upheld a lower court decision in favor of a unit of American International Group Inc. and ruled that it was not required to pay additional interest under its exaggerated policy in a case where the primary policy was annulled.  The plaintiff in the complicated case was Jin Ming Chen, who was injured at a construction site and sued the main contractor, New York-based Kam Cheung Construction Inc., according to Tuesday's decision of the New York Court of Appeals Jin Ming Chen v. Insurance Co . in the state of Pennsylvania.
At the time, Kam Cheung had $ 1 million primary liability insurance with Arch Specialty Insurance Co., a unit in Hamilton, Bermuda-based Arch Capital Group Ltd., and $ 4 million in excess insurance. event at AIG unit Insurance Co., Pennsylvania, according to the decision.
In December 201
During that time, Arch successfully sought a review of its policy due to material errors made by the construction company in its application. As a result, it provided no coverage in the case, according to the decision.
Mr. Chen then filed a lawsuit against AIG, which led the Supreme Court to accept AIG's proposed $ 1.3 million ruling, plus additional interest.
Mr. Chen appealed to the Appeals Department, with one of the issues in the case being certain interest payments covered in the primary policy.
The Board of Appeal upheld the decision of the lower court. The Court of Appeal also confirmed the decision to divide the appeal into a 5-2 decision.
“Under its terms, the (AIG) policy did not lapse if Arch failed to fulfill its obligations; there were to cover losses that exceeded those covered by Arch Policy, up to (AIG's) $ 4 million liability limits.
"The fact that Arch Policy was repealed does not guarantee a different reading of the simple language in two insurances, although it unfortunately resulted in a coverage gap that included both the $ 1 million liability limit for Arch Policy and certain interest covered" in Arch The police's supplementary payment provision, it said, to confirm the appeals department's decision. Two different views, one of which said: "The facts in this case are very odd, which may have led the majority to misinterpret the contracts in question."
Lawyers in the case and AIG did not respond to a request for comment.