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Additional Insured Entitled to Defense and Indemnification

July 15, 2009

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In Regal Construction Corporation v. National Union Fire Insurance Company of Pittsburgh, the City of New York engaged defendant URS Corporation to be the construction manager for a renovation project at Riker's Island. By written agreement, URS hired plaintiff Regal Construction Corporation to serve as the prime contractor for general construction, as well as for demolition and renovation. In March 2001, Regal was supervising demolition of a bath and shower area of the prison and the replacement of flooring. Ronald LeClair, Regal's project manager, then performed a walk through of the area. LeClair stepped onto a joist in order to point to a wall, but was unaware that the joist had been freshly painted. LeClair then slipped and sustained personal injury.
Prior to the commencement of Regal's work, INSCORP issued a commercial general liability policy to Regal that provided additional insured coverage. The policy provided for additional insured coverage "only with respect to liability arising out of [Regal's] ongoing operations performed for that [additional] insured."
Regal and INSCORP commenced an action for a declaratory judgment against URS and its insurer, National Union, in an effort to avoid any obligation to provide coverage to URS. The Supreme Court held that INSCORP was obligated to defend and indemnify URS in relation to LeClair's personal injury action. Regal and INSCORP appealed.
The Appellate Division, Second Department, upheld the Supreme Court's decision. Specifically, the court reasoned that Regal had responsibilities that encompassed all of the demolition and construciton work to be done during the course of the project. As such, Regal's responsibilities under its contract with URS could not be separated from the cause of and occurrence of LeClair's incident. The Appellate Division indicated that the general nature of the operation in the course of which the injury was sustained should be the focus of a court's analysis of additional insured language as opposed to the precise cause of the accident.
Thanks to Brad Thelander for his contribution to this post.
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