In a dispute between two insurers, the district court determined that the contractor was not an additional insured under the subcontractor's policy. Navigators Spec. Ins. Co. v. St. Paul Surplus Lines Ins. Co., 2015 U.S. Dist. LEXIS 79338 (N. D. Cal. June 17, 2015).
McDevitt & McDevitt Construction Corporation was the general contractor for construction of a condominium complex. McDevitt was insured by Navigators Specialty Insurance Company. F&M was a subcontractor for the project for providing structural steel components. F&M's subcontract required it to obtain liability insurance and name McDevitt as an additional insured under a policy that was to be primary. F&M secured a policy with North American Capacity Insurance Company (NAC) which included an endorsement for additional insureds. The endorsement provided that an entity could be an additional insured only with respect to "occurrences resulting from work performed by you during the policy period, or occurrences resulting from the conduct of your business during the policy period."
McDevitt and F&M were sued for construct defect claims. Navigators defended McDevitt and NAC defended F&M. Navigators tendered McDevitt's defense to NAC because McDevitt was an additional insured under NAC's policy. NAC disclaimed coverage.
Navigators filed an action for declaratory judgment and both parties moved for summary judgment. It was undisputed that F&M completed the work that was the subject of the underlying lawsuits by June 2005, several months prior to the start of the NAC policy period. The only additional work that was completed by F&M during the policy period was the installation of a sink bracket in November 2005. But this work did not cause the property damage alleged in the underlying complaints. Navigators argued that because some of F&M's work was completed during the policy period, all of F&M's work should be considered to be within the policy period.
The court found, however, that the phrases "resulting from work" and "resulting from the conduct of your business" meant that the "occurrence" must have been caused by F&M's "work" or "conduct." Further "during the policy period" modified "work" and "conduct of your business." Specifically, the work under the subcontract or other business "conduct" that caused the "occurrence" must have been performed during the policy period.
Because there was no evidence that F&M's work or business conduct during the policy period caused the occurrence that gave rise to the liabilities in the underlying actions, McDevitt was not an additional insured under the NAC policy.