Illinois Appellate Court, First District Finds Coverage For Additional Insured Under Blanket Additional Insured Endorsement
The Illinois Appellate Court, First District recently issued a decision construing the written contract requirement of a blanket additional insured endorsement in a commercial general liability (“CGL”) policy. Reading together a contract, work order, and certificate of insurance, the appellate court in Mt. Hawley Ins. Co. v. Robinette Demolition, Inc., 2013 IL App (1st) 112847, reversed the trial court’s decision on cross-motions for summary judgment and found that the putative additional insured was entitled to coverage.
Mt. Hawley Insurance Company issued a CGL policy to Cobra Concrete Cutting Service, Inc. (“Cobra”) for the period from March 20, 2008 to March 20, 2009. The policy contained an additional insured endorsement providing that “Who Is An Insured” is amended to include “all persons or organizations where required by written contract.” On April 8, 2003, Cobra and Robinette Demolition Company (“Robinette”) entered into an “ongoing subcontract agreement” (“the Agreement”) pursuant to which Cobra would perform concrete cutting services on future projects. The Agreement required Cobra to defend, indemnify and hold harmless Robinette and “any and all other Additional Insureds specified in Schedule ‘B’ hereof…” Schedule B required that the insurance obtained by Cobra include an endorsement naming Robinette and “any other parties as may be reasonably required by [Robinette]” as additional insureds.
On February 10, 2009, Robinette sent Cobra a work order for a project at 850 Lake Shore Drive (“the Lake Shore Drive project”), which expressly incorporated Schedule B to the Agreement. Robinette subsequently received a certificate of insurance revised on February 11, 2009 adding Robinette and Valenti Builders, Inc. (“Valenti”) as additional insureds.
Robinette and Valenti were named in a personal injury lawsuit filed by an employee of Cobra, who allegedly sustained injuries on February 25, 2009. At issue was whether Valenti was an additional insured under Cobra’s policy pursuant to the written contract requirement in the blanket additional insured endorsement. The court noted that while in general, parol evidence is only admissible if the contract is ambiguous, it is also admissible to identify what the contract is rather than to vary or change the terms of the contract. The court stated that the Agreement between Cobra and Robinette contemplated Cobra’s work on future projects. Robinette’s representative responsible for insurance testified in his affidavit that for each project, Robinette would send Cobra a list of additional insureds, and that in connection with the Lake Shore Drive project, he faxed Cobra a sample certificate and requested that Cobra add several additional insureds, including Valenti. He subsequently received a certificate of insurance and an addendum naming Valenti as an additional insured.
The court found that due to the ongoing nature of the Agreement, the parties intended for Cobra to obtain additional insured coverage for other entities designated by Robinette. Further, though the work order, certificate, and Agreement were not executed at the same time, the court found that they were part of the same “ongoing transaction” and construed them together. In addition, the court stated that while the certificate of insurance alone did not satisfy the written contract requirement, it “provide[d] an additional writing which supports a finding that the written agreement between Cobra and Robinette contemplated that, at a future time, Robinette would name other entities to be added as additional insureds.” The court rejected the trial court’s determination that Valenti was required to be identified by name in the Agreement, and held that Valenti was an additional insured under Cobra’s policy.