Under Hawaii law, a party to a construction contract cannot exempt itself from liability for bodily injury caused by its “sole negligence or willful misconduct.”  Haw. Rev. Stat. §431:10-222.   Texas is similar in that it does not allow an indemnity agreement to cover an indemnitee’s sole negligence, but provides an exception if the contract expressly provides otherwise provides otherwise.

     The Texas Supreme Court recently examined whether a contractual bar against indemnifying a party for its own negligence should also apply to the party’s additional insured status in an insurance policy.  Evanston Ins. Co. v. Atofina Petrochemicals, Inc., 2008 Tex. LEXIS 122 (Tex. Sup. Ct. Feb. 15, 2008).  In Evanston, Atofina Petrochemicals contracted with Triple S Industrial Corporation to perform maintenance at a refinery.  The contract provided Triple S would indemnify Atofina from all personal injuries sustained during performance of the contract, except to the extent the injury was caused by Atofina’s negligence.  Triple S also agreed to provide primary comprehensive general liability and excess liability coverage, naming Atofina as an additional insured in each policy.

     An employee of Triple S was killed at the Atofina facility when he fell through a corroded roof.  When the employee’s survivors sued Atofina and Triple S, the CGL policy limits were tendered.  Atofina then demanded coverage as an additional insured from the excess carrier, Evanston.  Evanston denied the claim and Atofina sued.  The trial court granted summary judgment in favor of Evanston, but the Texas Court of Appeals reversed, holding the excess policy covered Atofina.

     On appeal to the Texas Supreme Court, Evanston argued Atofina agreed in its contract with Triple S that it would not seek indemnity for losses resulting from its negligence.  Evanston claimed the language of its policy similarly excluded coverage for losses caused by Atofina’s negligence.

     The Texas Supreme Court affirmed the Court of Appeals.  Where an additional insured provision is separate from an indemnity provision, the scope of the insurance requirement is not limited by the indemnity clause.  Under the contract, Atofina was not entitled to indemnification by Triple S if the loss was occasioned by Atofina’s negligence.  But Atofina did not seek indemnity from Triple S; instead, it claimed indemnification from Evanston as an additional insured under the policy.  Even if Atofina’s negligence alone caused the employee’s death, the Evanston policy provided direct insurance coverage to Atofina.

     Given the facts in Evanston, Hawaii courts would likely also find coverage regardless of Haw. Rev. Stat. §431:10-222.