MTA Sues Insurance Firm After Cancellation of Policies

Los Angeles County’s transit authority has sued its insurance company for canceling coverage for the troubled subway project after hundreds of property owners in Hollywood and North Hollywood filed claims alleging damage from tunneling.

In the Superior Court lawsuit, the Metropolitan Transportation Authority accuses Argonaut Insurance Co. of Menlo Park, Calif., of failing to honor its contract.

Argonaut provided primary liability and workers’ compensation insurance for rail construction from 1986 through June of this year, when the company canceled its policies after expensive setbacks in the Metro Rail project.

MTA contends that Argonaut canceled the policies despite assurances that it would not do so, and despite millions of dollars in premiums paid by the agency, the MTA said in a statement.