LPGM

Federal Court agrees with LPGM and dismisses additional insured coverage action.

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Summary

LPGM partner Andrew Premisler recently succeeded in urging the Southern District of New York to dismiss an additional insured coverage action. In a detailed 22-page decision, the Federal Court carefully parsed the underlying allegations and extrinsic evidence to, in effect, set some boundaries with respect to a carrier’s duty to defend and indemnify an additional insured.

This insurance coverage matter followed an underlying personal-injury action brought by a worker against a project owner and general contractor. In the coverage action, the owner and contractor – through their insurer – sought additional insured coverage under a policy issued by LPGM’s insurer client to a subcontractor (the underlying claimant’s employer). Under the subject policy, such additional insured coverage would apply only if the underlying accident was “caused by” the subcontractor’s acts or omissions. The coverage, in any event, would not apply to the claimed additional insureds’ own independent acts or omissions. In other words, it covered only the claimed additional insureds’ vicarious liability for an injury proximately caused by the subcontractor.

In finding that there was no duty to defend, the Court agreed that – despite the well-established breadth of that duty – the underlying complaint and third-party complaint did not allege a reasonable likelihood that the subcontractor caused the accident. The Court did not give weight to those pleadings’ vague and conclusory allegations of negligence and the like, stressing that it must assess a duty to defend based on alleged facts. The Court then assessed extrinsic evidence pertinent to the underlying action and, again, found that there was not enough to trigger a duty to defend the additional insureds. All of this led to the additional finding that there was no duty to indemnify as well.

See New Hampshire Insurance Company v. The Travelers Indemnity Company, Case No. 23-CV-5968 (CM)(GS), 2024 WL 1484191 (S.D.N.Y. 2024)

LPGM regularly represents insurance companies in first and third-party claims, at the trial and appellate court level and in an advisory capacity.

Contact: LPGM Partner Andrew M. Premisler, apremisler@lpgmlaw.com, 212-784-3292.