Contractor Entitled to Coverage as Additional Insured on Subcontractor’s Policy

A New York Appellate Court upheld the lower court’s ruling that Pofi Construction Corporation (“Pofi”), the general contractor on a repair and maintenance projection for the subject building in Manhattan, was an additional insured under a policy Rutgers Casualty Insurance Company (“Rutgers”) issued to Pofi’s subcontractor for the restoration of the exterior façade, Sky VL Construction Corporation (“Sky VL”).

Pofi, the general contractor, sought additional insured coverage related to a personal injury action for bodily injuries sustained at a project site, under a policy issued by Rutgers to Sky VL. The plaintiff in the underlying personal injury action alleged that he was injured at the project site while performing work for his employer Sky VL. The Appellate Court found that “his injury arose out of the subcontractor’s ongoing operations on the construction project”—the complaint alleged, and the injured worker testified that he was inspecting the work at the time he was injured. Moreover, the appellate court held that Pofi was not required to obtain a judgment against Sky VL before bringing the coverage action against Rutgers.  Additionally, the Appellate Court found that Rutgers waived reliance on any coverage exclusions, because it sent notice only to Pofi’s insurer and not directly to Pofi, the additional insured, and any additional notice that was sent was not sent within a reasonable time.  Nonetheless, the Appellate Court found that none of the asserted exclusions would have applied: (1) Pofi was not seeking coverage for liability assumed under contract; (2) the injured worker was not Pofi’s employee; (3) Rutgers did not “demonstrate that the allegations of the [underlying] complaint can be interpreted only to excluded coverage” based on the Prior Work Exclusion; and (4) there was no evidence the subcontractor began the work prior to the effective date of the insurance policy.  POFI Constr. Corp. v Rutgers Cas. Ins. Co., Appeal No. 12525, Case No. 2020-02759 (N.Y. App. Div. Dec. 3, 2020).