Subcontractor’s Breach of Duty to Notify Insurer Does Not Bar Coverage for Contractor
In Mt. Hawley Insurance Co. v. Robinette Demolition Inc., Mt. Hawley Insurance Company filed a complaint against Robinette Demolition Company and Valenti Construction, LLC, seeking a declaration that Mt. Hawley did not owe a duty to defend and indemnify Robinette Demolition Company and Valenti Construction, LLC in a personal injury suit filed by Richard Bucholz, an employee of one of the Robinette’s subcontractors, Cobra. Robinette and Cobra Concrete Cutting Service, Inc. (Cobra) entered into an “ongoing sub-contract agreement” (the Agreement) under which Cobra would perform concrete cutting services for Robinette on future projects. The Agreement required Cobra to “defend, indemnify and hold harmless” Robinette and “any and all other Additional Insureds specified in Schedule ‘B’ hereof against all claims, damages, losses, costs, expenses, judgments and liabilities.” Schedule B delineated the type and amounts of insurance coverage and required that the insurance policy obtained by Cobra include an endorsement naming Robinette and “any other parties as may be reasonably required by [Robinette]” (emphasis omitted) as additional insureds. Robinette tendered its defense and indemnification to Mt. Hawley. Mt. Hawley responded denying liability coverage because Robinette was potentially an additional insured and it was subject to all policy terms. Mt. Hawley’s first notification of the Bucholz’s accident was Robinette’s tender, which was almost two years after the accident. Since Mt. Hawley was not notified of the accident in accordance with the terms of the policy, it denied any coverage. Mt. Hawley further determined that Valenti was not an additional insured under the policy because the agreement did not require Valenti to be added as an insured.
The court addressed the issue of whether the named insured’s breach of its duty to notify under the policy bars coverage for additional insureds who have complied with their duty under the policy notice provision.
The court ascertains the parties’ intent from the policy language. There is nothing in the notice provision of the policy making coverage for the additional insured contingent on the named insured’s compliance with its duty to notify. The court cannot import language into a policy that was not placed there by the parties but must determine what the policy is, not what a party argues it should be. The language of the notice provision does not evidence the parties’ intent to make the coverage for the additional insureds contingent on the named insured’s compliance with its duty to notify under the policy. Since Robinette Demolition Company complied with their duty under the notice provision of the policy, they are entitled to coverage as additional insureds.
The court then addressed the issue of whether there was a duty to defend and indemnify Valenti. Due to the ongoing nature of the Agreement, the unambiguous language of schedule B reflects the parties’ intention that, in addition to Robinette, Cobra was required to obtain additional insured coverage for other entities to be designated at a future time by Robinette. The work order referred back to the parties’ Agreement, which set forth that requirement. The fact that the certificate of insurance was issued by Cobra’s agent rather than Mt. Hawley’s agent is not dispositive. We agree that, by itself, the certificate of insurance does not fulfill the policy’s written contract requirement. The certificate does provide an additional writing which supports a finding that the written agreement between Cobra and Robinette contemplated that, at a future time, Robinette would name other entities to be added as additional insureds. Construed together, the Agreement, the work order, and the certificate of insurance satisfied the policy requirement that there be a written contract requiring Cobra to name Valenti as an additional insured. Contrary to Mt. Hawley’s position and the circuit court’s determination, the policy’s written contract provision did not require that Valenti’s name appear in the Agreement. We conclude that Mt. Hawley was required to provide insurance coverage for Valenti as an additional insured.
The court held that: (1) a subcontractor’s breach of its duty to notify insurer of its employee’s workplace injury and the employee’s personal injury lawsuit did not bar coverage for contractor; and (2) construction company was an additional insured under policy.
Mt. Hawley Insurance Co. v. Robinette Demolition Inc., 2013 WL 3864520 (Ill.App. 1 Dist.). (This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1)).
