Insurer has Duty to Defend Subcontractor Listed as Additional Insured on CGL Policy’s Certificate of Insurance but not Listed as Additional Insured on CGL Policy

In Old Republic Insurance Company v. Gilbane Building Company, Jeffrey Gerasi (“Gerasi”) was injured while working as an electrician for Geary Electric Company on a construction project at the building located at 520 South Federal Street in Chicago, which was owned by AT&T. Gilbane was the general contractor for the project, and Air Comfort was the mechanical subcontractor on the site at the time Gerasi was injured. Gerasi filed a personal injury lawsuit against Gilbane Building Company (“Gilbane”) and AT&T. Air Comfort was never named as a defendant, never referenced in any pleading, and was never added as a third-party defendant. Air Comfort was insured under the commercial general liability (“CGL”) policy that was issued to Old Republic. Gilbane tendered its defense in the Gerasi lawsuit to Old Republic Insurance Company (“Old Republic”). Old Republic filed a declaratory judgment action against Gilbane, seeking a ruling that it had no duty to defend or indemnify Gilbane.

Gilbane claims that the trial court’s interpretation of the subcontract between Gilbane and Air Comfort was too literal and that the parties intended Gilbane to be an additional insured on the CGL policy. The subcontract only requires that Air Comfort list Gilbane as an additional insured on its certificate of insurance, which Air Comfort did.  It does not require Gilbane be added as an additional insured on the CGL policy. The subcontract does, however, require that the employees of Air Comfort be named as additional insureds on the CGL policy, implying that the parties knew how to ensure that certain parties were included as additional insureds on the CGL policy.

The court reviewed whether an insurer has a duty to defend a subcontractor, who is listed as an additional insured on a CGL policy’s certificate of insurance, but not listed as an additional insured on the CGL policy.

Under Illinois law, where the certificate refers to the policy and expressly disclaims any coverage other than that contained in the policy itself, the policy controls. Gilbane was not listed as an additional insured on the CGL policy; the policy stated that additional insureds would be added under the CGL policy where required by contract, and the subcontract between Air Comfort and Gilbane did not require Gilbane be added as an additional insured on the CGL policy; there was no evidence that the parties intended Gilbane to be an additional insured on the CGL policy5 because the clear and unambiguous language of the subcontract did not make such a requirement; and the certificate of insurance contained a disclaimer that no additional rights were conferred within it, thus putting Gilbane on notice that the CGL policy, where it was not named as an additional insured, controlled.

Old Republic Ins. Co. v. Gilbane Bldg. Co., 2014 IL App (1st) 123430 (Ill. App., 2014).

NOTICE: 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).