The insurer's motion for summary judgment, seeking to deny coverage for an additional insured, was rejected in York Hunter Constr. Serv., Inc. v. Great Am. Custom Ins. Serv., Inc., 2010 N.Y. Misc. LEXIS 4513 (N.Y. Sup. Ct. Sept. 17, 2010).
A plumber was injured on the job site when his foot got tangled in wire mesh. The general contractor, York Hunter, had subcontractors, including Inman Construction, for various projects. Inman, in turn, subcontracted with High Tech Enterprise & Electrical Services to do concrete work. High Tech was responsible for providing all labor, material, equipment, etc., and for providing insurance for itself and Inman. The Inman/High Tech subcontract provided that High Tech was bound by the terms of the contract Inman entered with York Hunter.
Pursuant to its contract with Inman, High Tech obtained a CGL policy from Utica Fire Insurance Company which was in effect at the time of the plumber's injury. The policy contained a "Blanket Additional Insured" endorsement for contractors, defined as any organization that High Tech was required to name as an additional insured under a written contract. High Tech's coverage for additional insureds, however, was limited to liability arising out of "Your work" for that additional insured.
High Tech eventually hired Crown Contracting Industries to place the rebar and wire mesh necessary for concrete work. After work began, Inman walked off the job and Crown became insolvent, forcing High Tech to finish the job of installing mesh wire and pouring concrete.
When York Hunterwas sued by the plumber, it sought coverage as an additional insured under the Utica policy issued to High Tech, contending that High Tech was required to procure additional insurance coverage for York Hunter as the general contractor. When coverage was denied, York Hunter filed an action for a declaratory judgment, arguing that High Tech subcontracted maintained a contractual obligation to York Hunter to have the mesh and rebar work completed.
Utica moved for summary judgment, arguing that the High Tech policy required that there be an effective written contract with High Tech before the additional insured provision was triggered. Even if the Inman/High Tech subcontract required York Hunter be named as an additional insured, once Inman walked off the job, the contract was "nullified." York Hunter countered that Inman's breach of its contract did not cancel or relieve High Tech of its own contractual obligation to procure and maintain insurance for York Hunter.
The court rejected Utica's argument. If Inman's breach excused High Tech's separate obligation to name York Hunter as an additional insured, it would render the insurance provision in the contract meaningless. Further, Utica could not disavow its insurance agreement with High Tech based on Inman's default.
Moreover, in the hold harmless portion of its contract with Inman, High Tech assumed responsibility and liability for "any and all damages or injury of any kind . . . arising out of . . . the execution of its Work." Accordingly, Utica's motion was denied.