Arkansas Builder Sues Zurich Over Denied Collapse Claim on Unfinished Home

An Arkansas builder has filed suit against Zurich American Insurance Company over a denied $420,000 insurance claim stemming from the collapse of a partially constructed home. Byrd Dozer Services alleges that Zurich breached its policy terms after the ground beneath a residential project in Fort Smith gave way, destroying the structure and halting construction entirely. The builder claims the incident meets the criteria for collapse coverage under the ‘Additional Coverage’ provisions of Zurich’s policy.

The complaint outlines that on July 8, 2025, the soil beneath the home’s slab caved in, resulting in substantial damage to the structure and its attached porch. Byrd Dozer asserts that its Zurich-issued policy includes coverage for collapse-related physical damage to buildings under construction—even without requiring a special endorsement. Despite an on-site inspection and a written demand for coverage, Zurich allegedly denied the claim both verbally and in writing.

Byrd Dozer is seeking damages exceeding $420,000 along with attorney’s fees, a 12% statutory penalty under Arkansas law, and a declaratory judgment affirming that the loss should be covered. The lawsuit centers on the interpretation of policy language, including coverage for collapses due to hidden decay, defective methods, or soil instability during active construction.

The case, filed in federal court on August 29, 2025, could become a touchpoint for how courts interpret ‘collapse’ coverage when a structure is still in progress. Insurance professionals will be paying close attention to how the court handles the contractual language and whether the collapse of an unfinished building qualifies for coverage under standard commercial property terms.