The plaintiff Bernadette Rubin (the “customer”) was allegedly injured in a slip-and-fall accident at a Super 1 Foods grocery store owned by Brookshire Grocery Company. The store was built by Ridgemont, a general contractor, pursuant to a construction contract between Brookshire and Ridgemont. In the lawsuit initiated by the customer against the store owner, the store owner filed a third party complaint against the general contractor and its liability insurer, Amerisure, alleging: (1) the contractor owed the store owner tort contribution because the contractor was at fault; (2) the contractor contractually agreed to indemnify and procure insurance coverage for the store owner; and (3) the store owner was entitled to insurance coverage under the Amerisure policy issued to the contractor. In response, the contractor and its insurer filed a motion for summary judgment seeking dismissal of the claims filed by the store owner on the following grounds: (1) any contractual indemnification obligation owed by the contractor to the store owner was null and void under Louisiana law; and (2) the store owner was not an insured under the insurance policy issued to the contractor.
In considering the summary judgment arguments, the court first noted that as the store owner did not argue it was a named insured under the policy, the question becomes whether the owner was an additional insured under the policy. On that issue, the store owner argued that under the relevant provision of the policy—the Contractor’s Blanket Additional Insured Endorsement—it was an additional insured under the policy. The court, however, noted that the building contract only required the general contractor to purchase and maintain “completed operations” coverage, noting that the Endorsement makes clear that the policy expressly limits coverage for an additional insured to “liability arising out of . . . your ongoing operations, unless the written contract or written agreement also requires completed operations coverage (or writing to the same effect), in which case the coverage provided shall extend to your completed operations for that additional insured.” The court further noted that pursuant to the contract, the contractor was only required to include the store owner as an additional insured under the Amerisure policy from the “date of commencement until date of final acceptance.” And, the contractor was only required to purchase insurance to protect the contractor from claims for damages because of bodily injury “which may arise out of or result from the contractor’s operations under the contract.” Although the contract did not define “operations,” the Court interpreted the term to mean actual operations, or work of the contractor while the grocery store was being constructed, and found that the contract did not require insurance for damages arising out of the result of completed operations, particularly as the policy defines the term. Accordingly, the court held that the store owner was not an additional insured under the policy after the construction of the store was completed, which was when the customer was allegedly injured in a slip-and–fall accident on the premises, and thus there was no coverage under the contractor’s insurance policy.
Take-Away: It is of the utmost importance that premise owners fully understand the scope and nature of any insurance coverage they may have, or not have, to ensure they are properly protected against any risk or loss.
This article was co-authored by Edie Cagnolatti, counsel at Irwin Fritchie Urquhart & Moore LLC.