Our insured was contracted to remove snow and ice from a parking lot of an apartment complex. Our insured reported to the property on February 18th and removed snow from the parking lot. On February 20th, a renter at the complex left their apartment and walked across the parking lot to their vehicle. On their way back to their apartment, they slipped on some ice in the parking lot, and became injured.
The injured party presented a claim to the insurance company of the apartment complex. The insurance company denied the claim and med pay, indicating that that our insured had signed a contract with their insured which absolved them of any and all liability and that the contractor would hold them harmless in the event of incident or injury on their property.
Their contract also states that the apartment complex will be added as an additional insured to our policy. This was not done. The contract stipulates that the insured can and will only report back to the property to do additional work once they are called to do so. The liability investigation is ongoing.
In regards to med pay, does the contractor's policy, (our insured's CGL) extend to this injured party?
Coverage C – Medical Payments Insuring Agreements. We will pay medical expenses as described below for bodily injury caused by an accident:(3) Because of your operations; provided that:
Does a fall that occurs 48 hours or so after we scrapped the parking lot fall within being "Because of your operations?"
Also, the policy has an exclusion that may come into play.
2. Exclusions We will not pay expenses for bodily injury:
f. Products-Completed Operations Hazard
Included within the products-completed operations hazard. Does that exclusion apply in this scenario? Appreciate your thoughts on the matter.
Kentucky Subscriber
First, under the standard ISO CGL Coverage Form, the insuring agreement for medical payments states that "we will pay for medical expenses as described below for bodily injury caused by an accident: (1) on premises you own or rent; (2) on ways next to premises you own or rent; or (3) because of your operations…"
The first two items fall under the responsibility of the property owner, regardless of anything else. The word "or" following item (2) lists a third way the insured may be liable. An injured person may not collect medical payments from both the property owner and a third party contractor.
In this case, since the injured person was on the premises of the property owner, then the property owner is the appropriate party to provide medical payments coverage. Paragraph b. of Medical Payments says the payments will be made regardless of fault. So regardless of the contractual agreement between the property owner and the snow removal contractor, the property owner bears the liability to the injured person on their premises.
The products-completed operations hazard applies to work that the insured does. So in the case of your insured, once the parking lot had been cleared and the contractor left the premises, and the lot was put back to its intended use, the work was completed. Even if the insured had to be called back to do further cleaning, the products-completed operations hazard definition clearly states that, "work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed." The insured's snow removal contract with the property owner was a completed operation. The liability for the injured person rests with the property owner.