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Residual value insurer’s suit against Gallagher moves forward - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Residual value insurer’s suit against Gallagher moves forward by Richard Sine Agents and Brokers , Claims Disputes , P/C Insurers Arthur J. Gallagher & Co. Aug 17, 2026 A residual value insurer’s case against Arthur J. Gallagher & Co., accusing the brokerage of botching underwriting and monitoring duties on a commercial lending program, can proceed, a federal judge in New York ruled. The case, Great American E&S Insurance Co. v. Arthur J. Gallagher & Co. , was decided Thursday in the U.S. District Court for the Southern District of New York. Judge J. Paul Oetken denied a motion to dismiss Great American E&S’s claims for declaratory judgment, breach of contract, negligent provision of professional services and negligent misrepresentation. Gallagher arranged commercial loans for companies, mostly in the technology sector, that pledged their businesses, including intellectual property, as collateral, according to the ruling. Great American, a unit of American Financial Group of Cincinnati, Ohio, issued insurance policies to cover the lenders’ trustee if borrowers defaulted and the pledged assets were insufficient to repay the loans. UMB Bank, of Kansas City, Missouri, served as the trustee. Great American alleged Gallagher conducted inadequate underwriting reviews, omitted important financial information about the borrower companies and underplayed problems with their financial condition, according to the complaint. Some of the companies have defaulted and others have threatened to do so, it said. Great American said it would not have issued the policies had it known the borrower companies’ true condition. Managing general agent PIUS Ltd. and its affiliate Newlight Capital operated the program, including loan underwriting and monitoring and loss mitigation, before they were acquired by Gallagher , according to the ruling. Gallagher folded the companies into Gallagher IP Solutions in 2023. Gallagher argued Great American’s declaratory judgment claim was not ready for review because no arbitrator had yet found the insurer liable to UMB Bank, which has separately made claims against Great American under the policies. Judge Oetken rejected that argument, pointing to contract language obligating Gallagher to both defend and indemnify Great American and noting that Great American has already incurred defense costs. The judge also found Great American’s allegations of misrepresentation and negligence adequately pleaded, rejecting Gallagher’s push for a heightened pleading standard. Gallagher must now answer the remaining claims within 14 days of the August 13 ruling. A Gallagher spokesman declined to comment on the ruling. 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