AIG Construction Defect Coverage Row Sent To Arbitration

Law360, New York (May 22, 2013, 4:37 PM ET) -- A California federal judge ruled Tuesday that a construction defect coverage dispute between a general contractor and two American International Group units belonged in arbitration, even though the insurance contracts didn't have an arbitration provision.

U.S. District Judge Edward M. Chen said that Swinerton Inc. was bound by the arbitration clause in a letter of understanding it signed with its insurers in 2009 and couldn't seek defense coverage in federal court for an underlying lawsuit blaming the contractor for water intrusion, deterioration of pipes and other...
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