The New York Court of Appeals in Worth Constr. Co. v. Admiral Ins. Inc. interpreted an additional insured endorsement of a commercial general liability insurance policy.  The issue concerned the provision providing that the additional insured was insured only regarding liability arising out of the insured’s (subcontractor’s) work.  In Worth, the injured worker fell on a stairway that the insured subcontractor had constructed.  However, the general contractor ultimately conceded that the insured was not negligent as to the worker’s accident.  As such, the Court of Appeals held that the general contractor did not have coverage under the subcontractor’s insurance policy as an additional insured because the injured worker’s accident occurred at the situs of the subcontractor’s work but was not due to any negligence on the subcontractor’s part — i.e., the liability did not arise out of the insured’s work.

The Appellate Division, First Department recently addressed a gloss on Worth in Bovis Lend Lease LMB v. Garito Constr. Inc.  In that case, the injured worker’s accident occurred at the situs of the insured subcontractor’s work.  A jury found the general contractor and insured subcontractor negligence, but did not find that the subcontractor’s work was the proximate cause of the accident.  

The Majority held that the jury’s finding that the insured subcontractor was not the proximate cause of the accident was analogous to the general contractor’s concession in Worth that the insured subcontractor was not negligent.  Therefore, the First Department held that the general contractor was not entitled to coverage as a general contractor.  The Dissenting Justices disagreed and held that coverage should have been afforded to the general contractor.

Because two Justices dissented on the same issue of law, and the declaratory judgment action is final, the Court of Appeals will hear the appeal.  New York Civil Law will keep you apprised of the results.