AIU Insurance Co. v. American Motorists Insurance Co.
| Decision Date | 26 March 2002 |
| Citation | 740 N.Y.S.2d 296,292 A.D.2d 277 |
| Parties | AIU INSURANCE CO. et al., Respondents,<BR>v.<BR>AMERICAN MOTORISTS INSURANCE CO. et al., Appellants-Respondents, and CORD CONTRACTING CO., INC., Respondent-Appellant, et al., Defendant. |
| Court | New York Supreme Court — Appellate Division |
The underlying action arose out of construction conducted at the site of plaintiff Hotel Grand Central. Plaintiff AIU was the general commercial liability insurer of both the Hotel and its general contractor, plaintiff HRH, under a policy that broadly designated its coverage as excess to that of any other responsible contractor working at the site. The injured party was an employee of defendant Cord, the drywall and millwork subcontractor. Cord's liability insurer was American Motorists, under a policy that additionally covered HRH and the Hotel, in compliance with Cord's contractual obligation to insure, indemnify and hold harmless those parties. Cord's employee was injured when he allegedly tripped and fell over debris at the site, including a conduit pipe that may or may not have been left by another subcontractor, defendant Forest Electric Corp. That subcontractor maintained liability insurance with defendant St. Paul, under a policy that similarly covered HRH and the Hotel as additional insureds.
In the underlying action against the Hotel and HRH, those parties impleaded subcontractors Cord and Forest. The instant action is an effort to compel American Motorists and St. Paul to undertake the primary defense of HRH and the Hotel in the underlying action, and to indemnify their general liability insurer, AIU, for expenditures incurred in that defense.
The IAS court focused on the fact that AIU's coverage was excess to other existing policies, and that American Motorists and St. Paul did include AIU's insureds in the coverage of their respective subcontractors. But what that court overlooked was the nature of the coverage in the American Motorists and St. Paul policies. The endorsements in each of those policies, naming the Hotel and HRH as additional insureds, incorporated by reference all terms and conditions of the underlying policies insuring Cord and Forest. Among the terms and conditions in those policies was language limiting liability coverage for additional insureds to claims specifically "arising out of" work performed for the additionally insured party. Cord's employee allegedly suffered his injury during the course of work performed for the...
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