CORNELL GRACE WINS ADDITIONAL INSURED COVERAGE AND IMMEDIATE DEFENSE FOR CONSTRUCTION CLIENTS September 16, 2022

In 2016, Cornell Grace was retained to defend two of its construction clients, an owner and construction manager/general contractor, in a personal injury action brought by the employee of a subcontractor who claimed to have been seriously injured.  The worker claimed to have tripped on a piece of electrical wire that appeared to have been left by jobsite electricians.  After impleading the electrical contractor (which was not enrolled in the client’s insurance program), the firm’s coverage group tendered the matter to the electrical contractor’s carrier, which refused to defend.  Cornell Grace then filed a Declaratory Judgment action against the electrical contractor and its carrier and marshalled the evidence necessary to move for summary judgment.  The carrier’s counsel argued that it had no duty to defend because the plaintiff was not employed by its insured, and because there was no finding that electrical wire was the cause of the loss.

In August 2022, the Supreme Court, New York County (Adams, J.) granted summary judgment in favor of our clients, declared them to be additional insureds on the electrical contractor’s policy, and ordered the electrical contractor’s carrier to defend the firm’s clients forthwith.  The Court also held that the electrician’s agreement to indemnify the owner and construction manager/general contractor for any losses arising out of or relating to the electrical work was an “insured contract” under the policy.

Cornell Grace pursues risk transfers for its construction clients wherever possible, including the aggressive prosecution of Declaratory Judgment actions against contractors’ carriers that refuse to defend and indemnify its clients as additional insureds.