The contractor was covered as an additional insured under the subcontractor's policy even though the parties had never actually signed an agreement to add the contractor to the policy. Evanston Ins. Co. v. Westchester Surplus Lines Ins. Co., 2011 U.S. App. LEXIS 20081 (9th Cir. Oct. 3, 2011).
The policies held by Bellevue Master, the general contractor, required it to be an additional insured under any subcontractor's liability policy. Northwest Tower Crane Services was a subcontractor. Bellevue Master LLC, faxed a message that Northwest could continue to be a subcontractor on the project if it complied with Bellevue Master's insurance requirements. Northwest contacted its insurance broker and requested an insurance certificate be issued to Bellevue Master so that it would be an additional insured under Northwest's policy.
When a loss occurred, Bellevue Master's insurers denied coverage, contending Bellevue Master had failed to contract with Northwest to became an additional insured under Northwest's policy. The district court agreed.
The Ninth Circuit reversed. A unilateral contract existed when one party offered to do a certain thing in exchange for the other's performance and the other party performed, constituting acceptance. Bellevue Master's fax was an offer: Northwest could continue as a subcontractor if it complied with Bellevue Master's insurance requirements. Northwest accepted the unilateral contract when it added Bellevue Master to its policy. Therefore, the policy covered Bellevue Master as an additional insured, and Bellevue Master's insurers were obligated to provide coverage.
