$49M window war. Insurers clash over payment for faulty UI Children's Hospital windows
Two insurance companies, American Guarantee and Liability Insurance Company (Zurich) and Starr Indemnity & Liability Company, have filed lawsuits against Cupples International. They argue that their policies do not cover the $49 million arbitration award Cupples was ordered to pay UI Health Care for faulty windows at the UI Children's Hospital. The insurers claim the arbitration award is due to a breach of contract, not property damage covered by their policies. The window replacement project is ongoing, with completion expected by 2026.
A pair of insurance companies are locked in a scuffle over payment of a nearly $50 million arbitration ruling University of Iowa Health Care won for faulty windows.
Illinois-based insurer American Guarantee and Liability Insurance Company, also known as Zurich, has filed a lawsuit against Cupples International, the Missouri-based company contracted to design the windows at the Stead Family Children's Hospital.
Lawyers for Zurich argue the company's policies "do not provide coverage for the costs associated with the replacement of Cupples' work and product," including, in this case, the windows.
Hundreds of windows were identified by the university in need of replacement do to safety concerns and faulty design. The company argues they do not need to pay the university for the faulty windows.
Federal suit is latest turn in Stead Children's Hospital's window saga
Windows on floors four and five at the 14-story children's hospital were pegged for replacement as part of an initial $10-15 million project approved in 2021, kickstarting a lengthy back-and-forth.
The hospital is home to nearly 900 windows. Ongoing issues were identified in the eight years since the hospital was built, including window cracking and delamination.
The Iowa Board of Regents later green-lit a $45 million project to replace the patient room windows on floors three through 11, along with windows along the hospital's connector bridge. Exterior slot windows are being added to enhance safety and weatherproofing of existing windows.
More: Meet Lulu Johnson, the 1st Black woman to earn a Ph.D in Iowa, and her 7-foot bronze statue
Lawsuits provide further details on cost of faulty Stead windows
According to court documents, University of Iowa Health Care sought more than $20 million to cover the costs of full window replacement.
The arbitration panel ultimately decided on a $49,462,962 award in July 2025. The final award was issued to UI Health Care on July 3, but few details were immediately available.
More: WW2 veteran Bill Knapp to receive military honors at Iowa cemetery he helped create
Arbitration notes the university's incurred and future costs, including $39.6 million in total window repair costs. The UI had already spent more than $18.9 million on window repairs by the time arbitration was awarded, including money for protective window film and clip installation and temporary windows.
The film and clips were installed to prevent patients or staff from being struck by glass if the windows broke, the UI previously said in its Iowa District Court lawsuit.
When arbitration was decided, the panel estimated that UI Health Care was expecting an additional $30 million in repairs, according to court documents.
Insurers argue they don't need to pay $49.5M arbitration
Zurich's 20-page lawsuit, filed in the U.S. District Court for the Southern District of Iowa on Oct. 10, requests that the court affirm Zurich's claim that it is not responsible for paying out the $49.5 million arbitration.
Lawyers for Zurich filed more than 800 pages worth of exhibits.
Starr Indemnity & Liability Company filed a similar lawsuit against Cupples in September.
Both lawsuits argue that the arbitration is not connected to "property damage" caused by an "occurrence" covered under Cupples' insurance policy. Lawyers in each case wrote, "[r] eplacement of the defective construction product" does not constitute property damage.
Instead, the lawsuits argued, the arbitration award was simply an affirmation of Cupples' breach of contract, which was presented in a since-dismissed lawsuit UI Health Care filed against Cupples.
Window replacement at the UI Children's Hospital began in 2023.
More: Johnson County Jail readies for $3M renovation despite talks of a new facility. What to know
The project cost rose by 16% to $52.5 million in February 2025, the Press-Citizen previously reported.
All defective windows are expected to be replaced by the end of 2026, a spokesperson previously told the Press-Citizen.
Ryan Hansen covers local government and crime for the Press-Citizen. He can be reached at rhansen@press-citizen.com or on X @ryanhansen01.
This article originally appeared on Iowa City Press-Citizen: Insurers clash over $49M in UI Children's Hospital window feud
