Cornell Grace Wins Summary Declaratory Judgment Of Additional Insured Status For Major General Contractor In Catastrophic Labor Law Claim December 2, 2012

One of Cornell Grace’s specialties is insurance coverage litigation. Due to the vicarious and absolute liability implications of the New York State Labor Law in construction accident cases, general contractors and owners routinely require their subcontractors to procure and provide additional insured coverage to them under the subcontractor’s own general liability policy. When claims arise, however, carriers often disclaim coverage to these entities. Our firm aggressively litigates these claims on behalf of our clients, forcing carriers to defend and indemnify their additional insureds under well-settled New York law.

In one particularly complicated case, various subcontractors’ carriers had disclaimed their additional insured coverage obligations to Cornell Grace’s client, a major general contractor managing a large scale industrial site construction in Rockland County. A worker employed by the masonry subcontractor was struck and killed on site by a vehicle – owned by a leasing company and leased to a steel subcontractor. To complicate matters even further, the driver of the vehicle was a steel worker who was employed by yet another steel company. Thus, the various carriers disputed whether they should provide additional insured coverage to the general contractor since the claim could be argued to “arise out of” a variety of different subcontractors’ work. Furthermore, this was, in essence, an automobile accident that also implicated the Labor Law. The general liability carriers – some of which had explicit automobile exclusions in their policies – argued that the automobile carrier covering the vehicle should provide the sole or at least primary coverage.

Navigating these complicating factors, Cornell Grace moved for summary judgment and obtained a declaratory judgment that the general contractor was entitled to primary additional insured coverage under the masonry subcontractor’s general liability carrier, and that the vehicle’s auto carrier must also indemnify the general contractor for any vicarious liability due to the negligence of the driver. This decision was then used to facilitate a global settlement of the underlying claim, with contribution by the various carriers – and none by Cornell Grace’s client or its own carrier. Furthermore, the masonry contractor’s carrier reimbursed them for all defense costs incurred in the underlying litigation.