Commercial Division Blog
Plaintiff Fails to Show That it Was Additional Insured
On September 19, 2016, Justice Marks of the New York County Commercial Division issued a decision in Taunus Corp. v. Zurich American Insurance Co., 2016 NY Slip Op. 31747(U), holding that the plaintiff was not an additional insured under an insurance policy, explaining:
An insurer's duty to defend arises whenever the allegations within the four comers of the underlying complaint potentially give rise to a covered claim. This standard applies equally to additional insureds and named insureds. It is the party claiming insurance coverage that bears the burden of proving entitlement, and a party that is not named an insured or an additional insured on the face of the policy is not entitled to coverage.
(Internal quotations and citations omitted). The court examined the insurance policy at issue and determined that "to qualify as additional insureds under the Zurich policies, the Deutsche Bank Entities must demonstrate the fulfillment of two conditions precedent. The first is a written contract, executed prior to the occurrence of any loss. The second is that the liability must arise out of work performed by Gilbane, or on its behalf, at the Liberty Street Building."
As to the first condition, the court found that even though there was a written contract naming the Deutsche Bank Entities as additional insureds, the condition was not met, explaining:
The Access Agreement includes signature lines for both Gilbane and the Deutsche Bank Entities. Gilbane appears to have executed the Access Agreement, but there is no evidence that the Deutsche Bank Entities ever executed that agreement. . . .
The First Department has held that an insurance policy was not ambiguous as to who was required to sign the agreement where the agreement contained signature lines for two parties. Further, the First Department has held that a party was not afforded additional insured status where the only written document was never signed by that party. . . .
In this case, the language in the Zurich policies is clear that who is an additional insured is limited not just to a party with a written contract, but that the written contract must be executed prior to the occurrence of any loss. Interpreting the insurance contract under the same principles as any ordinary business contract, that language in the Zurich policies is unambiguous, and reasonably susceptible to only one meaning. Moreover, the Appellate Division in National Abatement noted that the additional insured coverage in that case did not exist, and the fact that an unsigned contract may be enforceable if there is objective evidence the parties intended to be bound or the eventual writing was intended to be valid retroactively has no bearing on whether there is a written contract pursuant to the policy
endorsement. Pursuant to the Zurich policies' terms, the Access Agreement must be executed by both Gilbane and the Deutsche Bank Entities before additional insured coverage under those policies can exist. Accordingly, the Access Agreement provides no valid basis for the claim of coverage by the Deutsche Bank Entities as additional insureds, because it was not fully executed.
(Internal quotations and citations omitted). The court went on to hold that the second condition, that the liability arise out of the work performed by the named insured, also was not met.