A New York state trial court recently ruled that general contractors/owners were entitled to primary coverage under both their own commercial general liability policy and under a subcontractor’s general commercial liability policy as an additional insured. Briarwoods Farm Inc., et al. v. Central Mutual Ins. Co., 2008 NY Slip Op 28435 (N.Y. Sup. Ct. Orange County Oct. 29, 2008). In light of the decision, the insurers issuing the policies were equally obligated to cover the costs associated with an underlying wrongful death action.

Plaintiffs, Briarwood Farms and its shareholders, sought coverage as an additional insured under a CGL policy issued to a subcontractor who died while working at the plaintiffs’ job site. The underlying wrongful death action was settled by plaintiffs’ CGL insurer. A declaratory judgment action was subsequently brought by the general contractors/owners against the subcontractor’s CGL insurer, which argued that it was excess over the general contractor's own insurance.

The Court examined the policies' "other insurance" clauses and found that the subcontractor’s policy provided primary coverage to the plaintiffs as additional insureds, ruling that “absent a showing that a general contractor was actually seeking excess coverage rather than primary coverage, a subcontract's language calling for coverage of the general contractor/owner as an ‘additional insured’ requires the subcontractor to provide primary coverage.”

The court then examined the plaintiffs’ CGL policy and determined that it also provided primary coverage to the plaintiffs. As both policies provided plaintiffs with primary coverage, the Court ruled that the insurers issuing the two policies were “equally obligated to cover the costs associated with the settlement of the underlying wrongful death action.” As one of the two policies other insurance clause was silent as to the method of sharing in those costs, the court reserved its decision as to the method of sharing.

For a full copy of the Court's opinion, please click here.