A New York surety is going after an electrical contractor and its principals – including their spouses as indemnitors – to recoup more than $1.8 million tied to a string of allegedly defaulted public works bonds.
United States Fire Insurance Company filed its case on April 23, 2026 in the Eastern District of New York, asking the court to enforce a General Indemnity Agreement against Palace Electrical Contractors, the Palazzo Dhaim Partnership, and four individuals – Gerard Palazzo, Catherine Palazzo, George Dhaim and Gail Dhaim. According to the filing, the surety stepped in after Palace was allegedly defaulted or terminated on a series of bonded projects across Long Island and New York City.
The backstory, as told in the filing, is familiar to anyone who has worked a surety claim. US Fire says it agreed to back Palace based on a General Indemnity Agreement signed on or about December 28, 2015, and later amended on March 1, 2019. On the strength of that deal, the surety says it executed around 20 performance and payment bonds for contracts with the Town of Hempstead, the Hicksville, Carle Place, Plainview and Port Washington water districts, the City of New York, Nassau County, the Village of Hempstead, and several school districts, including Longwood, Valley Stream, Miller Place and Bridgehampton. A separate benefits and wage bond – eventually raised to a $250,000 penal sum – was posted in favor of the Electrical Industry Board of Nassau and Suffolk Counties…