Island Trees Union Free School District v A 1 Construction Service, Inc., et al.; One Beacon Insurance Group
Attorneys and Parties
Brief Summary
Insurance coverage in construction—whether a project owner qualifies as an additional insured under a subcontractor’s commercial general liability policy based on an endorsement triggered by the named insured’s agreement (written or oral) to provide such coverage.
Denied the School District’s motion for summary judgment and granted One Beacon’s motion, declaring One Beacon had no duty to defend or indemnify the School District as an additional insured.
The grant of summary judgment to One Beacon declaring no duty to defend or indemnify.
The additional insured endorsement did not require a written agreement or insurer notice; evidence raised a triable issue of fact as to whether there was an oral agreement by FALC Corp. (FALC) to provide additional insured coverage, so One Beacon failed to make a prima facie showing negating coverage.
Background
The Island Trees Union Free School District hired A 1 Construction Service, Inc. (A1) as general contractor for a school project in Nassau County. A1 subcontracted with FALC Corp. (FALC). A FALC employee was injured on the job and sued A1 and the School District, and those actions were consolidated. FALC was insured under a commercial general liability policy issued by One Beacon Insurance Group containing an Additional Insured endorsement for any entity that the Named Insured agreed to provide insurance for prior to the loss. The School District tendered for defense and indemnity as an additional insured; One Beacon denied coverage. The School District then brought this declaratory-judgment action against One Beacon seeking a defense and indemnity.
Lower Court Decision
The Supreme Court, Nassau County, denied the School District’s motion for summary judgment and granted One Beacon’s motion, effectively declaring that One Beacon had no duty to defend or indemnify the School District as an additional insured in the underlying personal injury action.
Appellate Division Reversal
Modified on the law: the Appellate Division affirmed the denial of the School District’s motion (because the School District’s certificate of insurance and general practice evidence did not establish, prima facie, a specific agreement by FALC to name the School District as an additional insured), but deleted the grant of One Beacon’s motion and substituted a denial. The court held the endorsement did not require a written agreement or insurer notice, and One Beacon’s evidence of no notice of a written agreement did not eliminate a triable issue of fact as to a possible oral agreement by FALC to provide additional insured status. Result: both sides’ summary judgment positions were denied, leaving the additional insured issue for fact determination.
Legal Significance
In New York, where an additional insured endorsement is triggered by the named insured’s agreement to provide insurance, the absence of a written agreement or insurer notice does not, by itself, defeat additional insured status if the endorsement does not impose such requirements. A certificate of insurance alone is insufficient to prove additional insured status, but an oral agreement by the named insured can create a triable issue precluding summary judgment.
For additional insured endorsements keyed to the named insured’s agreement to provide coverage, a certificate alone will not carry a movant’s burden, but an oral agreement can suffice to create a triable issue; absent a policy requirement of a writing or notice, insurers cannot win summary judgment merely by showing no written agreement or notice.