Selective Insurance sues Endurance over design liability defense dispute

Selective Insurance Sues Endurance Over Design Liability Defense Dispute

On August 27, 2025, Selective Insurance Company of America filed a lawsuit in the U.S. District Court for the Southern District of New York against Endurance American Insurance Company and Desman Inc., seeking a judicial declaration on defense obligations in an underlying wrongful death lawsuit. The case, docketed as Selective Insurance Company of America v. Endurance American Insurance Company and Desman Inc., centers on a dispute over which insurer must cover the defense costs for Desman, a design engineering firm, in litigation arising from a fatal incident at a New Jersey parking garage. Selective argues that its general liability policy excludes coverage for Desman’s professional services, shifting responsibility to Endurance’s design professionals liability policy. This inter-insurer coverage battle highlights escalating tensions in construction and design liability claims, where professional exclusions often lead to multi-policy disputes and potential reimbursement fights.

Background of the Underlying Incident

The dispute stems from the death of Maximilian Gray-Barquero on November 1, 2021, at the Redmond Parking Garage on the Rowan University campus in Glassboro, New Jersey. Gray-Barquero, a student, jumped from an upper level of the multi-story structure, leading to his fatal injuries. In a wrongful death lawsuit filed by his estate, Desman is accused—along with the university, contractors, and other parties—of negligence in the design, construction, installation, maintenance, ownership, operation, control, inspection, supervision, or overall management of the garage. The complaint alleges failures such as inadequate safety barriers, poor lighting, and insufficient suicide prevention measures, claiming these contributed to the tragedy.

Desman, a Chicago-based firm specializing in design and engineering for parking facilities, had provided professional services for the garage’s renovation project completed around 2018. The underlying suit, pending in New Jersey state court, seeks damages for wrongful death, survival claims, and emotional distress to family members, with potential exposure in the millions given the severity of the allegations.

Insurance Policies and Tender of Defense

Desman held two relevant policies:

• Selective’s Commercial General Liability (CGL) Policy: Effective during the project’s timeframe, this policy covers general liability for bodily injury and property damage but includes a standard professional liability exclusion. Selective contends that the claims against Desman arise from “design professional services” (e.g., engineering and architectural work), which are explicitly excluded, relieving Selective of any duty to defend or indemnify.
• Endurance’s Design Professionals Liability Policy: Issued later but covering claims first made during its policy period for wrongful acts in performing design services. This errors and omissions (E&O) policy is tailored for professional negligence in engineering and design, including defense for suits alleging faulty workmanship or oversight.

In November 2023, Desman tendered the defense to Selective, its CGL carrier. Selective agreed to provide a defense under a reservation of rights (ROR), citing the broad allegations that might implicate non-excluded coverage, but urged Desman to notify its professional liability insurer. Desman then tendered the claim to Endurance, which acknowledged it and assigned a claim number but has not assumed the defense. In December 2024, Selective’s coverage counsel formally demanded that Endurance (via its parent, Sompo International) take over the defense, arguing the claims fall squarely under Endurance’s professional coverage. Endurance refused, prompting Selective’s lawsuit for declaratory relief.

Allegations and Relief Sought

Selective’s complaint seeks:

• A declaration that Selective has no duty to defend or indemnify Desman under its CGL policy due to the professional services exclusion.
• A declaration that Endurance has a primary duty to defend Desman under its E&O policy, as the allegations involve design errors and omissions.
• Reimbursement to Selective for all defense costs incurred since the tender to Endurance (estimated in the low six figures as of filing, covering attorneys’ fees, expert consultations, and litigation expenses).
• Attorneys’ fees and costs for the declaratory action.

Selective argues that the underlying complaint’s focus on Desman’s design and supervisory failures triggers Endurance’s coverage, while its own policy only applies to non-professional liabilities (e.g., if construction accidents were involved, but not here). Endurance’s position, per preliminary correspondence, is that some allegations (e.g., maintenance or operational oversights) might not qualify as “design professional services,” potentially sharing or avoiding responsibility. Desman is named as a defendant to bind it to the court’s ruling but is not actively opposing at this stage.

The case invokes New York law for insurance interpretation (due to the venue), where courts strictly enforce professional exclusions in CGL policies unless allegations clearly fall outside them. Precedents like Supershield Ltd. v. U.S. Underwriters Ins. Co. (2017) emphasize that defense duties arise from the “four corners” of the complaint, but extrinsic evidence can refine coverage in declaratory suits.

Connection to Broader Insurance Trends

This lawsuit exemplifies the surge in coverage disputes over design and professional liability in construction-related claims, up 18% in 2025 per industry reports from Insurance Services Office (ISO). With increasing scrutiny on building safety post-high-profile failures (e.g., Surfside collapse), estates and plaintiffs often cast wide nets, alleging both general and professional negligence to maximize recovery. Insurers like Selective (a mid-tier property/casualty carrier) and Endurance (part of Sompo, focusing on specialty lines) frequently clash over “other insurance” clauses and priority of coverage.

Similar recent cases include:

• A 2024 dispute in California where an architect’s CGL carrier sued an E&O insurer over a hospital design flaw, resulting in a $2.5 million reimbursement award.
• Endurance’s own defense in a Texas federal case (Endurance Am. Ins. Co. v. Lloyd’s Syndicate 3624, 2023), involving subrogation over a construction defect, underscoring its exposure in multi-carrier fights.

Implications for Stakeholders

For insurers, this case could clarify the interplay between CGL and E&O policies in design liability suits, potentially reducing “reservation of rights” defenses and encouraging earlier tenders to specialty carriers. Design firms like Desman face heightened risks, as gaps in coverage could lead to out-of-pocket costs; experts recommend “project-specific” endorsements or broader E&O policies. In the underlying wrongful death action, a resolution on defense could accelerate settlement, especially with New Jersey’s favorable plaintiff laws for premises liability.

As of August 30, 2025, Endurance has not yet responded to the complaint, and the case is in early stages with a scheduling conference set for October. The outcome may influence how carriers underwrite construction risks amid rising claims from infrastructure projects. Policyholders should audit policies for overlapping coverages, while insurers may tighten professional exclusions to avoid subrogation battles like this one.