The coverage lawsuit at issue followed an underlying negligence action brought against a general contractor, a subcontractor and others. The general contractor sought additional insured coverage under the subcontractor’s policy. That policy included an additional insured endorsement which stated that i) “[t]he person or organization [required to be included as an additional insured, [i.e., the general contractor] does not qualify as an additional insured with respect to the independent acts or omissions of such person or organization”; and ii) “[t]he person or organization is only an additional insured with respect to liability caused by ‘your work’ [i.e., the subcontractor’s work] for that additional insured.” The trial court held that the insurer had a duty to defend because the underlying action alleged that the subcontractor – its named insured — caused the accident.
The First Department unanimously reversed, finding that the insurer had no duty to defend or indemnify the general contractor. The Court specifically found that a duty to defend was not triggered by the underlying negligence claims asserted against the named insured. As the Court concluded, the endorsement only covers an additional insured’s vicarious liability and, since no such claim was alleged against the general contractor, there is no coverage.