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New York Court Analyzes Additional Insured Coverage (NY)

October 1, 2020

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<p style="text-align: justify;">In a recent case decided by the New York Supreme Court, an insurer sought summary judgment on its action seeking defense and indemnity from another insurer. The Court rejected the insurer’s summary judgment motion, holding coverage for additional insureds is limited to situations where the insured is the proximate cause of the injury. The Court found “liability exists precisely where there is fault.”</p>
<p style="text-align: justify;">In <a href="http://www.courts.state.ny.us/REPORTER/pdfs/2020/2020_33060.pdf"><em>Greater Mutual New York Insurance Company v. New York Mercantile General</em></a>, Judge Bluth of the Supreme Court, New York County denied a motion for summary judgment that the defendant insurer had a primary and noncontributory duty to defend a property owner for an underlying slip and fall lawsuit. Greater New York (GNY) filed suit claiming the owner was an additional insured under the NYMG policy for a suit wherein the underlying plaintiff tripped and fell while walking in front of the owner’s sidewalk.</p>
<p style="text-align: justify;">GNY insured the owner and tendered to NYMG because it had insured a contractor who contracted to provide scaffolding work being undertaken at the owner’s premises. Of note, the underlying plaintiff sued the Owner and did not allege that the dangerous condition that caused his fall was related to scaffolding work. The Court noted that the pedestrian alleged he was simply lawfully on the premises, and not an employee nor employee of contractor. In opposition to GNY’s summary judgment for defense and indemnity, NYMG argued the contract between the owner and contractor did not specifically provide coverage for the owner as it only identified the real estate manager and not the Owner as additional insureds.</p>
<p style="text-align: justify;">The court took notice of the fact that an insurance policy additional insured endorsement providing “caused, in whole or in part” requires proximate causation since “but for” causation cannot be partial. The Court provided an event may not be wholly or partially connected to a result, “it either is or is not connected.” Further, although there may be more than one “proximate cause,” all “but for” causes bear some connection to the outcome, even if all do not lead to legal liability. The terms “caused, in whole or in part by,” and “solely caused by” are not synonymous. Thus, Coverage for additional insureds is limited only to situations where the insured is the proximate cause of the injury.</p>
<p style="text-align: justify;">This case illustrates the importance of examining the language utilized in an additional insured endorsement, as this likely will impact the circumstances under which an entity is determined to be an additional insured under a policy.</p>
<p style="text-align: justify;">Thanks to Thomas J. Bracken for his contribution to this post. If you have any questions or comments, please contact <a href="mailto:chayes@wcmlaw.com">Colleen Hayes</a>.</p>

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