Certain policy language continues to be a pitfall for Owners and Contractors seeking additional insured status. Following in the footsteps of the recent 2018 Court of Appeals decision in Gilbane v. St. Paul Fire & Ins. Co., the Appellate Division in Turner Constr. Comp. v. Endurance American Specialty Ins. Comp, (1st Dept. May 2018) held that to obtain Additional Insured status, plaintiffs were required to have a direct contract with the defendant’s named insured. Because neither plaintiff had such a contract, they did not qualify for coverage under the language of the AI endorsement and defendant insurance company was not obligated to defend or indemnify them in the underlying action. This continues to be a cautionary tale requiring appropriate due diligence in procuring and reviewing policies of the subcontractors involved in construction projects. Prudence may dictate that the owner or contractor seeking additional insured status enter into at least a limited written subcontract directly with each subcontractor it seeks coverage from to protect risk transfer.
