The legal conflict between Old Republic Insurance Company and I&A Renovation, Inc., a New York-based contractor, has emerged as a stark reminder of the financial and operational risks embedded in the construction industry. This dispute centers on a failed renovation project at the Olean Armory, commissioned by the New York State Office of General Services, where Old Republic, as the surety provider, seeks over $435,000 in damages from I&A and its principals, Khurram R. Khan and Fauzia K. Ghauri. The significance of this case lies in its illustration of how quickly a state-funded project can spiral into a financial burden for insurers when contractors default, highlighting the critical role of surety bonds and indemnity agreements. By tracing the timeline of events, this narrative aims to provide clarity on the sequence of failures and the resulting legal action, offering valuable lessons for stakeholders in construction and insurance sectors amid a growing wave of infrastructure projects across the United States.
Timeline of Events: From Contract to Courtroom
February 2022: Signing of the Indemnity Agreement
In February 2022, I&A Renovation, along with its principals, entered into an indemnity agreement with Old Republic Insurance Company. This agreement was linked to two surety bonds, each valued at $552,000, issued by Old Republic to secure I&A’s performance on the Olean Armory renovation. Under the terms, I&A was obligated to reimburse Old Republic for any losses or expenses incurred if the project failed, establishing a legal safeguard for the insurer. This step marked the beginning of a financial relationship that would soon be tested by unforeseen challenges on the project site.
May 2022: Project Commencement at Olean Armory
The renovation of the Olean Armory officially kicked off in May 2022, with I&A Renovation tasked with fulfilling a contract under the oversight of the New York State Office of General Services. High expectations surrounded the project, but early signs of trouble emerged almost immediately. Issues such as substandard workmanship, missed deadlines, and administrative lapses began to surface, casting doubt on I&A’s capability to deliver. These initial setbacks, while not yet disastrous, hinted at deeper problems that would eventually escalate and impact all parties involved.
September 2023: State Terminates I&A’s Contract
By September 2023, the persistent shortcomings in I&A’s performance could no longer be ignored. The New York State Office of General Services terminated the contractor’s agreement, citing repeated failures to adhere to project standards and timelines. This decision proved to be a turning point, as it activated Old Republic’s responsibilities under the surety bonds to intervene and manage the fallout. The termination not only exposed I&A’s inability to complete the work but also placed significant financial and logistical pressure on the insurer to address the situation.
February 2024: Old Republic Rehires I&A Under Supervision
In an effort to minimize losses, Old Republic made a strategic decision in February 2024 to reinstate I&A as an independent entity under direct supervision. The insurer aimed to steer the project back on track without resorting to a full contractor replacement, hoping that closer oversight would rectify ongoing issues. Unfortunately, this approach backfired. I&A continued to miss critical meetings, failed to correct prior mistakes, and was linked to a severe asbestos release incident that necessitated expensive remediation, further increasing Old Republic’s financial exposure.
April 2025: Final Termination and Replacement Contractor Hired
By April 2025, Old Republic reached the end of its patience and completely severed ties with I&A. The insurer hired RP Oak Hill Building Company for $328,700 to complete the remaining work on the Olean Armory. At this point, Old Republic had already incurred a shortfall of nearly $200,000 for project completion, in addition to over $218,000 in consultant fees to Cashin, Spinelli & Ferretti and almost $17,000 in legal costs. The total losses amounted to at least $435,259, reflecting the severe impact of I&A’s default. Engaging a new contractor marked the end of I&A’s role but left Old Republic grappling with substantial financial damage.
August 2025: Old Republic Files Lawsuit for $435,259
On August 4, 2025, Old Republic took legal action by filing a lawsuit in the Eastern District of New York, seeking over $435,000 in damages from I&A Renovation and its principals. The insurer alleged that despite multiple demands for reimbursement under the February 2022 indemnity agreement, the defendants had failed to pay any amount owed. This lawsuit represented the culmination of years of project mismanagement and financial losses, with Old Republic striving to recover its expenditures. The case remains active, with no response yet from the defendants, leaving the outcome uncertain.
Reflecting on the Fallout and Future Steps
Looking back, the sequence of events in this dispute underscored critical vulnerabilities in the construction and insurance industries. Key milestones, such as the state’s termination of I&A’s contract in September 2023, the failed reinstatement attempt in February 2024, and the final hiring of a replacement contractor in April 2025, highlighted how quickly a project could unravel, leading to Old Republic’s significant loss of over $435,000. The legal battle that ensued in August 2025 emphasized the importance of enforceable indemnity agreements. Moving forward, industry stakeholders should prioritize enhanced contractor vetting processes and explore digital monitoring tools to detect project issues early. Additionally, staying informed about the progression of this lawsuit and similar cases could provide further insights into mitigating such risks in future projects.
