American Alternative Insurance Corporation (AAIC) was recently named as a defendant in the lawsuit brought against it by the owners of the Binghamton-Johnson City Joint Sewage Treatment Plant. The owners are seeking more than $3.5 million. They allege that the insurance company denied coverage for the collapse of one of the plant's walls and the inability to immediately use the insurance funds to replace the wall further damaged their reputation, plant and trust from the work force and clients.
AAIC denied coverage because they said the wall fell because 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 insurance policy took effect. The owners are suing the builders as well in order to ensure they get their compensation.