Settlement reached in dispute between The Shaw Group and Zurich American Insurance

The Shaw Group Inc.—now owned by CB&I—has reached a settlement with its insurance company over more than $20 million in damages Shaw had to pay for allegedly defective welds on pipe spools. The terms of the settlement, reached in federal court in Baton Rouge, were not disclosed.

The dispute between Shaw and Zurich American Insurance Co. dates back to 2012 and involves a $107 million lawsuit that REC Solar Grade Silicon filed against Shaw Group and Shaw Process Fabricators in Moses Lake, Washington, back in 2009. Among other things, Shaw alleges it initially was forced to retain and pay its own law firms to defend itself against the REC lawsuit—and pay the $20 million settlement—because Zurich allegedly ignored the case for more than 14 months. In its lawsuit against Zurich, Shaw sought to have the insurance company indemnify it for any judgment and cover defense costs in the REC matter, as well as relieve Shaw from complying with any conditions in its insurance policy.

Shaw and Zurich reached a settlement not long after U.S. District Judge James Brady ruled in November against six of Zurich’s motions for summary judgment; Brady dismissed the case late last week after receiving word the settlement had been finalized, without awarding court costs or attorney’s fees to either side.

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