An insurance policy that clearly defines “contractor” as including property owners will be given full effect.
Hernandez entered into an agreement with Alanis to make renovations to his building. Prior to the renovation, Alanis purchased liability insurance from the insurer, Atlantic Casualty. The policy coverage did not apply to “bodily injury to any contractor for which any insured may become liable in any capacity.” The exclusion defined “contractor” to include “any independent contractor or subcontractor of any insured, any general contractor, any developer, any property owner,…and any and all persons working for and or providing services and or materials of any kind…”
While visiting the building, Hernandez fell through the first floor of the building and into the basement, suffering injuries. Hernandez filed a personal injury suit against Alanis and alleged that Hernandez’s injuries occurred because Alanis negligently removed part of the floor in the building without any warning signs.
The insurer, Atlantic Casualty, argued that the insurance policy specifically precluded coverage for Hernandez’s injuries because he was a property owner and, thus, qualified as a contractor as defined in the exclusion. Alanis argued that Hernandez was not a property owner because the exclusion unambiguously limited the term property owners to those that were performing work or providing services on the property.
The court held that the exclusion made clear the definition “contractor” included property owners, regardless of whether they were providing services or otherwise working on the property at the time of the injury. Thus, Hernandez qualified as a contractor under the policy so his bodily injuries were excluded from coverage, and the insurer had no duty to defend or indemnify Alanis.
Atlantic Cas. Ins. Co. v. Alanis Development Corp., 2011 WL 250320 (N.D.Ill., 2011).
