Imprecise Contract Language Precludes Additional Insured Coverage

Jul 27, 2017

There’s a difference between “for whom” and “with whom.”

Contractor know that insurance companies will peruse provisions in insurance contracts for language that will enable them to deny coverage.

The New York case, Gilbane Building Co. v. Liberty Insurance Underwriters, is an example of this. An article in the Hirschler Fleischer Construction Law Blog examines this case.

The lawsuit evolved from the construction of a building for the city of New York “on the Bellevue Hospital NYC campus.” The city hired the New York State Dormitory Authority to manage the project.

Gilbane, hired as the construction manager, stipulated in its contract with the Authority that the prime contractor, Samson Construction Co., name Gilbane “as an additional insured under the prime’s liability policy.”

“Samson did just that, obtaining a policy from Liberty Insurance Company with a provision that stated that the basic policy was amended to include, as an additional insured, any organization ‘with whom’ Samson agreed to add as an additional insured.”

There were problems with the “excavation and foundation work.” The Owner sued the prime contractor and architect; the architect sued the construction manager.

Gilbane then filed a claim with Liberty Insurance. Liberty denied coverage and refused to defend Gilbane “stating that the CM did not qualify as an additional insured.”

Liberty argued that its agreement with Samson did not obligate them to defend Gilbane because the contract specified “with whom” rather than “for whom” Samson had entered into an agreement to add as an additional insured. Based upon this language, Liberty contended that because Samson and Gilbane did not have a written contract “agreeing to add the CM as an additional insured, there was no additional insurance coverage.”

The court agreed with this argument and Gilbane was denied coverage.

This is another example of the need for contractors to have their attorneys review essentially every word of contracts they enter into.


A Cautionary Tale Involving Additional Insured Coverage, HIRSCHLER FLEISCHER ATTORNEYS AT LAW, July 18, 2017.