"Arising out of" and "caused by" endorsements both apply and both additional insured policies provide primary coverage; Additional insured coverage owed by defendant insurers for Labor Law matter

Church Mut. Ins. Co. v. Endurance American Specialty Ins. Co., 2017 WL 2335770 (Sup.Ct. N.Y. Cty. May 18, 2017)

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Insurers of a contractor and its subcontractor must defend a building owner as an additional insured in an underlying personal injury action and reimburse the owner's insurer on a 50/50 basis, as directed by the an Order granting plaintiffs' motion for partial summary judgment.

An employee of the subcontractor allegedly slipped and fell while performing carpentry work at the job site. He and his wife sued the owner and general contractor for damages based upon Labor Law violations and negligence. Both the Prime Contract between the owner and contractor, and the Subcontract between the contractor and subcontractor, required that the owner be named as an additional insured on the defendants' policies. The owner tendered its defense and indemnification, but the defendant insurers did not accept. A declaratory judgment action ensued.

The Court found that the owner was entitled to additional insured coverage under both of the insurers' respective policies. Given that the injured plaintiff was allegedly injured during the course of his work for the subcontractor that had contracted with and performed work for the contractor, any liability "arises out of" the contractor's "work", as required by the contractor's policy. Evidence that the injured plaintiff was an employee of the subcontractor, injured during the course of his work, was sufficient to establish that the owner's liability was "caused in whole or in part by" the subcontractor.

The Court went on to find that there existed a "Goldfarb" conflict because the defendant insurers had not accepted the owner's defense without reservation. Both in fact were actively contesting coverage, and therefore the owner has the right the select its own independent counsel.

AGF&J partners Michael E. Gorelick and Thomas R. Maeglin represented plaintiffs and briefed the motion.


Michael E. Gorelick
Thomas R. Maeglin