Thomas F. O'Dowd v. American Surety Company New York

[3 N.Y.2d 347 Page 351] Plaintiff and defendant-respondent are general contractors. They entered into a contract with the New York City Housing
Authority (hereinafter called the Authority) to perform certain improvements at the Jacob Riis Houses in New York City. In
connection therewith, they procured from appellant insurer's predecessor a liability insurance policy which provided that
the insurer would "pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of the
liability imposed upon him by law for damages" (emphasis supplied). The policy excluded "liability assumed by the insured
under any contract or agreement".