ADDITIONAL INSURED CONTRACTOR ON SUBCONTRACTORS POLICY HELD NOT COVERED BY POLICY FOR INJURY TO SUBCONTRACTORS EMPLOYEE

ADDITIONAL INSURED CONTRACTOR ON SUBCONTRACTORS POLICY HELD NOT COVERED BY POLICY FOR INJURY TO SUBCONTRACTORS EMPLOYEE 270_C128

ADDITIONAL INSURED CONTRACTOR ON SUBCONTRACTORS POLICY HELD NOT COVERED BY POLICY FOR INJURY TO SUBCONTRACTORS EMPLOYEE

A building contractor hired a subcontractor to do ventilation work in a building under construction. The contractor required the subcontractor to add the contractor as an additional insured under the subcontractor's policy and further, to indemnify and hold the contractor harmless for any negligent acts or omissions of the subcontractor and subcontractor's employees.

During the course of the construction project, an employee of the subcontractor was severely injured when the tresses installed by the contractor collapsed. The injured employee was awarded substantial damages from the contractor.

The insurance carrier of the policy for the subcontractor (in which the contractor had been added as an additional insured), brought a declaratory action in district court to determine if they had any obligation to provide compensation through their policy.

The wording of the additional insured endorsement states: "WHO IS AN INSURED is amended to include as an insured the person or organization shown in the schedule, but only with respect to liability arising out of "your work" for that insured . . . " or in other words, the contractor is added as an additional insured but only with respect to the subcontractors work for the contractor. The district court decided in favor of the subcontractor's insurer in the summary judgment.

The contractor appealed citing that the contractor was an additional insured for purposes of the employee's injury. The district court agreed with the original ruling but remanded the case for review to the appeal court.

At the appeal court, it was affirmed that no coverage existed for the contractor under the subcontractor's policy in the action of the subcontractor's employee for the injuries resulting from the negligence of the contractor.

(Regent Insurance Company, Appellee v. Estes Company, Appellant. Iowa SCt. No. 127/95-1508. June 18, 1997. CCH 1997 Fire and Casualty Cases, Paragraph 6170.)