Litigation Update: Bodily Injury

Three cases settled in 2018 are a reminder how devastating an injury on a construction project can be, particularly if insurance fails to respond. How, or if, your insurance will respond depends on who is injured and at what point during a project the injury occurs. In the three examples below, the insured was left uncovered due to a lack of clarity around these issues.

An uncovered loss involving bodily injury is often catastrophic for the company held liable, both in regard to the project and long-term viability of the business.
Create a visual matrix which shows when each of your policies responds and what type of worker is covered within each time-period (equally important: which workers are not).
In the matrix above, include the exclusions listed in each policy so they can be easily identified, enabling your team to have a clearer understanding of your risks. Important note: Exclusions can apply to time periods, stages of the project or the type of worker

Injured on Ladder

In Deluxe Home Builders Corp. v. Harleysville Worchester Insurance Company, 2018 N.Y. Misc. LEXIS 3060 (NY Supr. Ct. July 6, 2018) (New York law), in connection with injuries sustained by an employee of a sub-contractor while ascending a ladder during construction, the Court agreed with the sub-contractor’s insurer that neither the owner nor the general contractor was entitled to additional insured coverage under its policy, because such coverage was explicitly limited to liability arising out of the named insured’s completed operations.

Whose Liability is it Anyway?

In Atlantic Casualty Insurance Company v. Damian Concrete, Inc., 2018 U.S. Dist. LEXIS 109350 (N.D. Ill. June 29, 2018) (Illinois law), in connection with the death of an employee of a roofing sub-contractor who fell through a hole in the roof that was covered by an unsecured and unmarked sheet of plywood, the Court agreed with the insurer of one of the contractors in charge of the project that its own policy did not respond, because the policy contained an Employer’s Liability exclusion which applied to bodily injury to ‘any “contractor”’ and the injured worker was a “contractor” for purposes of the exclusion.

General Contractor to repay Sub-Contractor

In Massachusetts Bay Insurance Company v. Cinncinnati Insurance Company, 2018 U.S. Dist. LEXIS 102019 (E.D. Mich. June 19, 2018) (Michigan law), while the Court held that the general contractor was covered under a sub-contractor’s policy despite the fact that it might have been solely responsible for the accident at issue (an employee of a sub-contractor of the sub-contractor/named insured — a granite installer — fell when using a step into the premises that the general contractor allegedly installed improperly), the Court also held that the general contractor’s insurer had to reimburse the sub-contractor’s insurer for some or all of the costs to defend and indemnify the general contractor.

Litigation Update: Bodily Injury