A subcontractor (sub) on a construction project arranged for the addition, under its general liability policy, of the project's general contractor (general) as an additional insured. The sub also had a workers compensation policy, to which the general was not a party, that was issued by the same insurance company.

The insured subcontractor completed and promptly submitted an "Employers First Report of Injury or Illness" when one of its employees was injured on the project. (The general contractor and the general liability policy were not mentioned in the report.) The insurer opened a workers compensation file, conducted its investigation and settled the claim.

The injured worker filed suit against the general contractor for personal injuries arising from the accident nine months after mistakenly suing the wrong party, another contractor whose officers were the same as those of the general and shared the same office facilities with the general. The general contractor tendered its defense to the sub's liability insurer, claiming it was an additional insured under that policy.

The insurer denied liability, claiming that the general contractor violated the policy's notice requirements. In ensuing cross-motions for summary judgment, the trial court concluded that the general contractor "received notice of the occurrence" when its associated company was served with summons and complaint and didn't inform its insurer of a potential claim at that time.

The court also determined that workers compensation notice by the named insured (subcontractor) at the time of the injury did not relieve the general contractor of its duty to notify the insurer of the lawsuit. Accordingly, the court entered summary judgment for the insurer.

The central issue on appeal was whether "notice from the employer of an injured party under a workers compensation policy satisfies the notice requirement for an additional named insured under a general liability policy issued by the same insurer." The court said that an insurer "is chargeable with knowledge of all policies issued by it to the insured." It observed that the policy required notice to the insurance company but not to designated departments, and concluded that notice to the workers compensation department was timely notice to the general liability department. The insurer was solely responsible for treatment of the notice.

The court said that it was unnecessary to address other issues in light of its disposition of this overriding one. The judgment of the trial court was reversed in favor of the additional insured (general contractor) and against the insurer.

(CASUALTY INSURANCE COMPANY, Plaintiff/Counter Defendant-Appellee v. E.W. CORRIGAN CONSTRUCTION COMPANY, INC., Defendant/Counter-Plaintiff-Appellant. Illinois Appellate Court. No. 1-91-2403. May 17, 1993. CCH 1993-94 Fire and Casualty Cases, Paragraph 4518.)