WOONSOCKET — The city had let its liability coverage lapse for almost a year when the Promac construction company legal battle began in 2003.

The timing of that lapse may be significant.

The current liability insurance carrier has sued the city, the mayor and Promac, saying it should not have to cover expenses related to the Promac lawsuit – in which the city’s School Department was found to have wrongfully terminated the construction company five years ago – because it was not the city’s carrier when the litigation began.

City Solicitor Christopher Lambert argued this week that the litigation began after the new insurance had kicked in. But records show that the city’s first mediation session with Promac and its lawyers appears to have occurred in June 2003, a full month before the new policy was issued.

During that time, the city was self insuring, while scrambling to find a new carrier, as it had been since June 2002, Journal archives show. Its former carrier had not renewed its coverage and Finance Director Robert Strom said it was struggling to find a reasonably priced policy and a company willing to carry the city. He denied allegations that the city had dropped the liability insurance as a cost-cutting measure.

It is unclear how that timing will affect the recent complaint filed by the insurer, National Union Fire Insurance Company.

Strom refused yesterday to answer questions about the complaint, saying it is an ongoing litigation matter. He said he would have to look for the paperwork related to the coverage dates and the application for coverage, and would call a reporter back. He did not return that call.

Promac lawyer Jules D’Alessandro also declined comment yesterday.

But the City Council President now says he will investigate the terms of the current policy and the matter of lapsed coverage.

“This is certainly something we need to pursue as a council,” President Leo T. Fontaine said. “Initially, this wasn’t something [the council was] working on. It was a school matter. Now it’s a legal matter affecting the city, so we have to come up to speed.”

In September 2001, the School Committee voted to dismiss Promac because of ongoing delays in the construction of the Gov. Aram J. Pothier Elementary School. Promac blamed the School Department for the problems.

Promac’s surety company, U.S. Fidelity & Guaranty Trust, was called in to finish the job and the school finally opened.

But Promac launched a legal battle against the city as it sought to recoup more than $2 million in fees related to the termination. The first mediation session on that matter between the two sides took place in June 2003.

Mediation eventually led to arbitration and a sternly worded decision by arbitrators who said the School Department committed a “major material breach” of contract when it fired Promac. It later awarded the company more than $3 million. That litigation is ongoing.