NY Ruling Curtails Contractors’ Additional Insured Coverage

  • June 9, 2017

New York's highest court ruled this week that a common insurance policy endorsement extends coverage to additional insureds only when an injury is proximately caused by the named insured's conduct, a ruling that substantially limits the protection available to general contractors whose subcontractors have purchased such policies.

Attorneys who represent policyholders said the majority's decision to interpret the additional insured endorsement as requiring a proximate cause standard, even though those exact words don't appear in the provision, marks a departure from well-established policy interpretation principles. Those concerns were also raised by the two-justice dissent.

“For the court to put 'proximately' in there, it added a word to a contract that was already written and, not only that, it is a word with great legal significance,” said Anderson Kill PC shareholder Allen R. Wolff.

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