No Privity, No Coverage (NY)
This third-party action stems from a personal injury action in which plaintiff was injured by a forklift at a construction site. The issue in this third-party action is whether co-defendants in the initial action were considered additional insureds under LaFace’s policy with Selective Insurance, such that Selective would be required to indemnify them.
Here, the Court held that for the co-defendants to be considered additional insureds on LaFace’s policy with Selective, they did not have to be in privity of contract with LaFace; however, some sort of written document, agreement or permit had to exist that stated the co-defendants were additional insureds on the policy. The Court further held that the prime contract, which included a provision that Laface assumed all the obligations and responsibilities of the general contractor, did not mean the subcontractor was liable to the co-defendants; but rather, made the subcontractor LaFace liable to the general contractor, EDC, but not directly liable to those parties EDC was liable to. Given that Selective did not provide coverage to the co-defendants as additional insureds on the primary policy, they were not additional insureds on the umbrella policy.
Thanks to Marysa Linares for her contribution to this post. Please contact Heather Aquino with any questions.