Despite being served numerous cease and desist orders in multiple states, an unlicensed company and its derivatives continue to sell construction performance bonds.
John Gauvin, a Coventry, RI-based developer, was in charge of overseeing a housing-development project in Plainfield, Connecticut. Before construction could start, however, 186,000 tons of granite had to be removed from the site. Gauvin later discovered that the performance bond for the project that was accepted by the town was essentially “worthless.”
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Gauvin found that the bond document’s date was wrong, and that the amount that was insured was more than what was required for the project. An unlicensed insurance company called Great Northern Bonding Company in Danbury – owned by one Leo Rush – had issued the bond.
“Who in their right mind pays more than they have to?” said Gauvin. “This project should’ve been completed already, in December.”
WRPI 12 reported that Gauvin filed a lawsuit late last month, naming the contractor and the town of Plainfield defendants as his project was put on hold.
This is not the first time Rush has been at the center of controversy for unlicensed business. Both Florida’s Office of Insurance Regulation and Rhode Island’s Department of Business Regulation have each sent cease and desist orders to Rush multiple times, but he has managed to open new agencies in different territories to skirt around the orders.
Rhode Island Department of Business Regulation Banking and Insurance superintendent Elizabeth Kelleher Dwyer said that Rush’s name is infamous around the department. She told WRPI 12 that her office has been at odds with his unauthorized businesses for nearly a decade.
“We first encountered Mr. Rush in 2007, and issued an order against him then,” Dwyer said.
Despite the number of cease and desist orders against him, Rush is currently listed as the “administrator” of Newport Insurance Company – a company in Providence, RI that claims to be in its eighth year of business.
“The website says we’re a market for people who can’t otherwise qualify for bonds,” Dwyer commented about Newport Insurance Company’s online presence. “They’re just an illegitimate market. They’re not a licensed insurer.”
Dwyer highlighted that an online insurance licensing database is available for customers to refer to in case they need to verify whether an insurer is licensed or otherwise.
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