United States Fidelity and Guaranty Co. v. Shorenstein Realty Services, LP
As we’ve said before, making sure your covered under some policy of insurance requires a bit of attention to the details in your contract and the details in the policy language. Our last installment regarding this issue involved the ability of a certificate of insurance to stand alone as evidence of coverage.
In this installment, the opinion in United States Fidelity and Guaranty v. Shorenstein provides an additional bit of policy language to be aware of.
The plaintiff, an insurance company, sought a declaration that it had no duty to defend
and indemnify the defendants to a lawsuit under a policy issued to a non-party for an accident at a construction site involving a scaffolding collapse in 2002. The entities seeking indemnification and defense owned the building and had entered into a construction contract with a non-party to the underlying suits in 2000 and the insurance coverage required by that agreement lasted into the time of the accident.
The construction contract required the construction company to name the defendants as additional insureds on its policy. The policy also included language stating that if someone was to be added to a policy as an additional insured by another written contract (i.e. the construction contract) then if a certificate of insurance had been issued naming that person, the person would be an additional insured.
The plaintiff argued that because a certificate of insurance had not issued until after the time of the accident, coverage did not exist where the existence of the certificate was expressly required by the language of the policy. The court found otherwise.
The court held that where the construction company and the defendants had specifically contracted for additional insured coverage, and the certificates had all the limiting language we saw in our previous entry on this topic, the interpretation that there was no coverage until the certificate issued would limit the term of the coverage to something other than the entire year it provided for. Reasoning that the certificate could not change the terms of the coverage given the clauses printed on the certificate specifically disclaiming that it modified any contract, the court in essence found that the date of the certificates issuance was a nullity, despite the language requiring that a certificate be issued in the actual policy.
Again, don’t just rely on the certificates. No matter what your position under the certificate, it’s becoming unlikely that they will afford you relief or protection apart from the policy and your contract.
