When a blanket additional insured endorsement provides coverage as required in a “written contract,” the First Department says the contract does not need to be signed.

In Zurich Am. Ins. Co. v Endurance Am. Speciality Ins. Co., an employee of Kras Interior Contracting Corp. was injured while in the scope of his employment. The employee sued the property owner and Newmark, the property owner’s agent.  Newmark hired Kras via a purchase order, which stated, “By accepting the order, vendor hereby agrees to become bound by the terms of the agreement.” The purchase order required Kras to procure insurance and name Newmark and the property owner as additional insureds.  Although the purchase order contained signature lines, it was never executed.

Newmark’s insurer tendered the defense of its insured and the property owner to Kras’s insurer, and eventually initiated a declaratory judgment action to establish the defendants’ entitlement to coverage as additional insureds. Kras’s insurer argued they did not qualify as additional insureds because the purchase order was not signed and, therefore, there was no contract in place.  The First Department noted that the blanket endorsement merely required a “written contract,” but did not require that the contract be executed.  Accordingly, the court held that Newmark and the owner were additional insureds.

When it comes to evaluating additional insured coverage, both the endorsement and the contract must be carefully scrutinized. The importance of undertaking this analysis cannot be underemphasized given the frequency with which litigation follows the above pattern—worker is injured on the job, sues the property owner and its agents, who then seek coverage as additional insureds to the worker’s employer’s policy.

Thanks to Chris Soverow for his contribution to this post.