Simon Glairy is a titan in the insurance world, specifically when it comes to the messy intersection of construction and utility liability. With a career defined by untangling multi-layered coverage disputes, he provides a unique perspective on cases where one spark can lead to dozens of lawsuits. In this discussion, we dive into the legal fallout of the Wappingers Falls explosion, examining how two insurance giants find themselves at odds over who should ultimately hold the check for a utility company caught in the crossfire of contractor errors.
Our conversation explores the complex architecture of priority-of-coverage disputes and the technical failures that trigger catastrophic property damage. We examine the specific roles of digging contractors and utility locators, the financial hurdles posed by multi-million dollar self-insured retentions, and the procedural milestones of federal litigation when insurers fight over “primary” versus “excess” designations.
In complex infrastructure projects, multiple contractors often list the utility company as an additional insured. How do insurers determine the hierarchy of coverage when an accident involves both a digging contractor and a utility locator, and what policy language typically dictates who pays first?
The hierarchy of coverage often feels like a high-stakes chess match where the board is built out of “other-insurance” clauses. In the Wappingers Falls disaster, we see a classic standoff where Travelers argues its policy is strictly excess because its insured, the digging contractor, is just one piece of the liability puzzle. The language is vital; for instance, the Travelers policy is structured to be “excess” over any other insurance when the insured is an additional insured elsewhere. When you have more than 20 different lawsuits piling up, the sensory reality of those legal bills becomes overwhelming, forcing insurers to scrutinize every word of the “primary non-contributory” language. Ultimately, if one policy promises to pay from the very first dollar without waiting for others, as is alleged of the Zurich policy, that insurer is typically expected to lead the defense.
Gas line strikes during excavation often lead to massive property damage and personal injury claims. What technical steps should a utility take to verify markings before digging, and how does a locator’s alleged failure to mark lines shift the legal burden?
At 7 Brick Row, the failure to accurately locate a service line turned a routine replacement project into a scene of devastation that destroyed multiple residences and left people with serious bodily injuries. The technical burden begins with the locator, in this case, Onecall Holdings/USIC, who must precisely mark the subterranean landscape to prevent the excavator’s teeth from ever touching a live line. When a locator allegedly fails this duty, as claimed in the Shantelle Whyte case, the legal burden shifts toward their professional negligence, potentially insulating the utility company from direct blame. For the utility, Central Hudson, the process involves a frantic verification of these markings against old blueprints, but once the gas ignites, the focus shifts to whether the excavator, J. Mullen & Sons, should have sensed the danger before the strike. It’s a step-by-step breakdown where every inch of soil moved is a potential point of liability, and the smell of sulfur in the air often comes too late to prevent the wave of lawsuits that follow.
Policies with high Self Insured Retentions, such as $2 million, can complicate the defense of a utility company. How does such a retention impact a company’s immediate legal strategy, and what are the specific challenges in seeking reimbursement from another insurer?
A $2 million Self Insured Retention acts as a massive financial dam, holding back the insurer’s obligation until the policyholder has bled out a significant amount of capital. For a utility like Central Hudson, which demanded coverage just a week after the November 2, 2023, explosion, this retention creates an immediate liquidity crisis where they must find millions just to keep their legal defense afloat. The challenge arises when one insurer, like Travelers, steps in to pay these bills while another, like Zurich, argues that the $2 million retention hasn’t been satisfied or that other exclusions apply. It’s a gut-wrenching financial position to be in, watching $8 million in aggregate limits sit just out of reach while you’re footing the bill for 20-plus ongoing legal battles. Travelers is now fighting to bridge that gap, demanding that the court force Zurich to acknowledge their “primary” status and pay back every cent of the defense costs already spent.
Disputes over “primary non-contributory” versus “excess” clauses frequently end up in federal court. What is the standard process for litigating these coverage declarations, and what factors influence an insurer’s decision to pursue a jury trial?
Litigating these declarations in the Southern District of New York is a grueling marathon that begins with a formal complaint, much like the one filed on May 8, 2026, seeking a judicial declaration of rights. The process moves through intense discovery where every email and policy draft is scrutinized to determine if the “excess” designation is legally ironclad. When an insurer demands a jury trial, as Travelers has done here, they are often betting that a jury will see the unfairness of one giant insurer sitting on its hands while another manages a catastrophic crisis. These cases can stretch for years, with typical timelines involving motion practice that attempts to resolve the “primary” status long before a jury ever hears about the actual explosion at 7 Brick Row. The high stakes are driven by the need for reimbursement, as Travelers isn’t just looking for future coverage but is seeking the return of substantial defense costs plus interest.
What is your forecast for insurance litigation involving gas infrastructure explosions?
I forecast a significant increase in aggressive “additional insured” litigation as aging gas infrastructure leads to more frequent and costly catastrophic failures. As the limits of liability are pushed—like the $8 million general aggregate seen in this case—we will see insurers becoming even more defensive, utilizing high Self Insured Retentions to delay their entry into the fray. The legal battleground will move away from simple negligence and toward these complex “primary versus excess” disputes, where the winner is determined by the most precise policy drafting. Ultimately, we are entering an era where the legal fallout of a single spark will take longer to resolve than the physical rebuilding of the homes destroyed in the blast.
