A federal appeals court on Tuesday upheld a lower court’s ruling on behalf of Selective Insurance Group Inc. in a coverage dispute with Amerisure Insurance Co . regarding a construction accident.
In 2015, an employee of Baldwinsville, New York-based C&D Laface Construction Inc., a subcontractor building a movie theater in Camillus, New York, was seriously injured in an incident involving a forklift driven by one of his co-workers, according to court papers in Amerisure Insurance Co., Amerisure Mutual Insurance Co. v. Selective Insurance Group Inc., DBA Selective Insurance Co. of America. The project’s contractor was Midlothian, Virginia-based Eilerson Development Corp.
Pursuant to the terms of the general agreement and subcontract, EDC had obtained a commercial general liability policy and an umbrella policy from Farmington Hills, Michigan-based Amerisure and C&D had obtained a CGL policy and an umbrella policy from Branchville, New Jersey-based Selective.
A lawsuit filed by the worker and his wife against EDC and the property owners was settled. Litigation then arose regarding the owners̵7; additional insured status and the priority of coverage between Amerisure CGL and selective umbrella policies.
The U.S. District Court in Albany, New York ruled in Selective’s favor, holding that the property owners are not further insured under the Selective policies and that the Amerisure policy is primary to the Selective umbrella policy with respect to claims against Eilerson.
The decision was upheld by a three-judge appeals court. Because C&D “did not assume EDC’s obligation to name the owners as additional insureds, the owners are not traditional insureds under the selective policies,” it said.
The panel also held “that a traditional priority of coverage analysis should prevail here,” which “clearly demonstrates that the Amerisure CG policy is primary to the selective umbrella policy.”
Attorneys in the case did not respond to requests for comment.
A federal appeals court ruled in February that Selective could deny coverage based on a policy’s pollution exclusion even though it did not address that issue in its original denial letter.