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New York Court of Appeals Holds Additional Insured Language Provides Coverage to an Additional Insured only when the Injury Was Proximately Caused by the Named Insured

Blogs, Insurance Coverage

Burlington Ins. Co. v. NYC Transit Auth., No. 57, 2017 WL 2427300 (N.Y. June 6, 2017). The New York Court of Appeals changed New York Law by limiting endorsements that provide additional insured coverage for bodily injury to cases in which the named insured proximately caused the injury. The decision construed the standard ISO CG 20 10 additional insured endorsement, which provides coverage: “…only with respect to liability for bodily injury…caused, in whole or in part, by (1) your acts or omissions; or (2) the acts or omissions of those acting on your behalf.”

The New York City Transit Authority was an additional insured under a policy on which a contractor was the named insured. A Transit Authority employee fell from an elevated work platform following an explosion at an excavation site occurring when an employee of the named insured contractor hit an electrical cable. During discovery, documentation showed that the additional insured was at fault because it failed to mark the electric cable or to turn off the power.

The insurer successfully argued that coverage did not apply when the named insured was not the proximate cause of the injury. In contrast, the additional insured argued the policy applied to any act or omission by the contractor that caused an injury, whether or not the contractor was negligent. The court held that the additional insured’s position was too broad. In reaching this decision, the court explicitly rejected a “but for” causation test, which would have found coverage if there was any causal link from the named insured to the injury.

This case addressed only the duty to indemnify. The duty to defend should be in effect until proximate causation is determined.