Blanket Additional Insured Endorsement
August 29, 2016
The general contractor brought an action against the subcontractor and the subcontractor's liability insurer seeking a declaration that it was an additional insured under the subcontractor's policy, and that the insurer was obligated to defend it in an underlying personal injury lawsuit by the sub-subcontractor's employee. This case is Mecca Contracting v. Scottsdale Insurance Company, 140 A.D.3d 714 (2016).
Mecca was the general contractor on a construction project and hired Salcora Construction to perform certain work on the project. Mecca entered into a contract with Salcora wherein Salcora agreed to purchase liability insurance and list Mecca as an additional insured. Salcora purchased a general liability policy from Scottsdale.
While Mecca was not explicitly named as an additional insured on this policy, the policy did have a blanket additional insured endorsement attached. This endorsement provided that any person or organization whom Salcora was required to add as an additional insured on the policy pursuant to a written contract would be considered an additional insured under the policy. The policy provided Salcora with primary coverage and the blanket additional insured endorsement provided any additional insured with excess coverage unless a written contract specifically required that the Scottsdale policy be primary. It is undisputed that the contract between Mecca and Salcora expressly states that the Scottsdale policy would be primary.
A worker for a sub-subcontractor hired by Salcora on the project site was injured when his hand became trapped under a fire escape ladder. He sued Mecca and others and Mecca sought coverage under the Scottsdale policy. The insurer disclaimed coverage and Mecca brought this action, seeking a declaration that the insurer was obligated to provide a defense. The Supreme Court, Kings County, granted summary judgment to Mecca and the insurer appealed.
The Supreme Court, Appellate Division, Second Department, New York, noted that Mecca established its prima facie entitlement to the declaration sought by simply submitting its contract with Salcora. In that contract, Salcora agreed to make Mecca an additional insured. The policy provided primary coverage to Salcora and under the blanket additional insured endorsement, Scottsdale agreed to provide primary coverage to any party with whom Salcora entered into a contract if such contract specifically required the Scottsdale policy to be primary. Since the policy provided Salcora with primary coverage and Salcora agreed to make Mecca an additional insured, the contract between Mecca and Salcora constituted a contract requiring Scottsdale to provide Mecca with primary coverage, and satisfied the requirement of the blanket additional insured endorsement.
In opposition, Scottsdale failed to raise a triable issue of fact. Accordingly, the opinion of the trial court was affirmed. Mecca was an additional insured entitled to primary coverage under the Scottsdale policy.
Editor's Note: Even though the blanket additional insured endorsement stated generally that coverage for an additional insured would be excess, it also stated that if a written contract specifically required that the policy provide primary coverage for the additional insured, the policy would be primary. Mecca and the insured (Salcora) entered into a contract wherein the parties agreed that the policy would provide primary coverage to Mecca. Why the insurer disputed this issue is a mysterious question since the contractual language clearly established its obligation to defend Mecca under a primary basis.