A federal appeals court has overturned a lower court decision and held a Nationwide Mutual Insurance Co. unit is required to provide coverage in connection with a trade unionist's damage from an electric boom lift as an additional insurance company, not as a surplus of the insurer  A window cleaning company contracted with Stamford, Connecticut-based United Rentals (North America) Inc. in June 2007 to rent an electric boom lift, which was used at a trade show in Rhode Island, according to Friday's decision by the US 1st Circuit Court of Appeals in Boston Scottsdale Insurance Co. v. United Rentals (North America) Inc.
Four days later, while being run by a window cleaner, the elevator struck and injured a trade fair participant.
The participant and his wife sued United Rentals, the window cleaning company and others in connection with the accident and claimed in part that the elevator alarm had not warned the participant that he would be "run over" by the elevator, according to the decision.
The window cleaning company was insured by the Nationwide unit Scottsdale Insurance Co., which had to add another insured each party with whom it entered into an agreement. United Rentals was insured by ACE American Insurance Co., the decision said.
This led to coverage disputes and a decision by the U.S. District Court in Boston that United Rentals was entitled to defense costs from Scottsdale as an additional insured under Scottsdale policy.
Following the settlement of the underlying dispute, the court also ruled that Scottsdale must provide additional insurance coverage to United Rentals, but that this coverage was excessively higher than United Rentals' own coverage under ACE's commercial general liability policy.
A panel of three panel judges found that Scottsdale was obligated to provide coverage, but as an additional insurance company not an excessive insurance company. The ACE CGL policy "can properly be described as a" fronting "arrangement with a limit of 2 M $ and a deductible of 2 M $," because the first 2 million USD of any loss must be paid by United Rentals, and when it has done so, 2 $ "Police border" is considered exhausted ", states the decision.
"As United Rentals has no" other valid and collectible insurance ", Scottsdale Policy provides coverage to United Rentals here," was mentioned in the departure from the lower court's judgment and reconsideration of the case for further negotiation.
United Rentals lawyer David E. Schroeder, a lawyer with Tribler Orpett & Meyer PC in Chicago, said in a statement: "I obviously think it was a fantastic result.
"It is also an important decision in the matter of fronting policies are 'other valid and collectors' insurance' for" other insurance "analysis purposes. The court went to most of the courts that have stated that they are not.
Scottsdale's lawyers did not respond to a request for comment. Catalog