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Appellate Division, First Department, Grants City Additional Insured Coverage in Vicarious Liability Case (NY)

August 5, 2021

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<p style="text-align: justify;">In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2021/08/City-of-New-York-v.-Travelers-Prop.-Cas.-Co.-of-Am..pdf">City of New York v. Travelers Prop. Cas. Co. of Am.,</a></em> No. 14146, 2021 WL 2690464 (N.Y. App. Div. July 1, 2021), the City of New York (the City), plaintiff, contracted with the Central Park Conservancy (CPC) to maintain Central Park.  Pursuant to this commitment, the CPC entered into a subcontract with Bartlett Tree Expert Company (Bartlett) to maintain the park’s trees.  As a requirement of this subcontract, Bartlett obtained a CGL policy from defendant, Travelers Property Casualty Company of America (Travelers), naming the City and the CPC as additional insureds. The policy provided coverage to both entities arising out of Bartlett’s operations, except that “person or organization does not qualify as an additional insured with respect to independent acts or omissions of such person or organization.”</p>
<p style="text-align: justify;">After the Claimant was injured by a falling tree branch in Central Park, she sued the City and CPC alleging that her injury arose out of negligent acts or omissions of the City, the CPC, and/or its contractors and subcontractors.  When the City sought additional insured coverage under Bartlett’s policy, Travelers afforded insurance coverage for injuries caused by Bartlett, but not “with respect to the acts or omissions of the additional insured.” The City brought this suit in response to Travelers disclaiming coverage.</p>
<p style="text-align: justify;">The Appellate Division, First Department, ruled in favor of the City.  The court held that the Claimant’s allegations, paired with the evidence found in the tree-service contract and business records memorializing Bartlett’s work on the trees triggered Travelers’ duty to defend. The court noted that the evidence “demonstrate[s] that there is a <strong><em>reasonable possibility</em></strong> that the City will recover under the policy's additional insured provision, which affords coverage premised on the City's vicarious liability for the acts or omissions of the named insured, Bartlett; therefore defendant [Travelers] is required to defend the City in the action.” The court also found that the possibility that the City may subsequently be found liable solely for its own negligent acts or omissions did not negate Traveler’s duty to defend the City.</p>
<p style="text-align: justify;">Accordingly, this case offers guidance how New York courts will rule regarding an insurer’s defense obligations to an additional insured when independent negligence and vicarious liability claims are both being asserted against the additional insured.</p>
<p style="text-align: justify;">Thank you to Christopher McCarthy for his contribution.  Please email <a href="mailto:chayes@wcmlaw.com">Colleen Hayes</a> with any questions.</p>

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