In a recent New York appellate decision, the court considered whether an insurer could rely on several policy exclusions concerning independent contractors to disclaim coverage.

In Century Sur. Co. v. All In One Roofing, LLC, the Appellate Division, 10 Leonard Street, LLC hired McAlpine Construction to perform work on its building.  McAlpine hired All In One Roofing to install the roof.  All In One hired Vasyl Berezhanskyy to perform the work, Berezhanskyy hired Zdeno Jadron.  Jadron was injured during the course of the work and sued 10 Leonard, McAlpine and All In One.  All In One’s carrier, Century Surety disclaimed coverage based two independent contractor exclusions that disclaimed coverage for any injury to an employee of an independent contractor.  Surety asserted that Berezhanskyy was an independent contractor and that his acts, omissions and negligence caused the injuries to Jadron.  At trial, the jury returned a special verdict finding that Berezhanskyy was not an independent contractor of All In One, and the Supreme Court declared that Surety owed coverage to All In One in connection with Jadron’s action.

On appeal, the court found that based on the evidence, there was a valid line of reasoning and permissible inferences which could have led a rational jury to conclude that Berezhanskyy was not an independent contractor. Berezhanskyy and Edmond Warchick, the principal of All In One, appeared to agree that there were aspects of the job that were not under Berezhanskyy’s control, including the type of roof to be installed, the number of screws and plates used in the installation of certain aspects of the roof, the date the work was supposed to start, and, finally, when a second roof was discovered by Berezhanskyy after he commenced work under the contract, what to do with the second roof. As such, the jury could have reasonably concluded that Berezhanskyy was not solely responsible for the methods and means of the job and that he was not “free from the control and direction of the person for whom the services are being performed.”

This case serves as a reminder that an insurer’s burden of demonstrating that exclusions apply to negate coverage remains high, and that aspects of the interpretation of the exclusions may be left to the jury.

Thanks to Rebecca Rose for her contribution to this post.