Lorin Donnelly and Sarah Ziolkowski of MMP&S secured a reversal of a lower court order determining the priority of coverage between a general contractor’s primary policy and a subcontractor’s excess policy. The subcontractor’s primary policy afforded additional insured coverage to the general contractor in an underlying personal injury action. The issue in the declaratory judgment action was whether an endorsement contained in the subcontractor’s excess policy rendered the excess policy over and above the general contractor’s primary policy. The lower court determined that the general contractor’s primary policy was next in line after the exhaustion of subcontractor’s primary policy. The New York State Appellate Division, First Department reversed and declared that the general contractor’s primary policy was excess over and above the subcontractor’s excess policy. The Court based this decision on the specific language of the subject endorsement in the excess policy. The endorsement specifically referenced the subcontract, which provided that the insurance afforded to the general contractor, “whether issued on a primary or umbrella/excess basis,” shall be primary to, and non-contributory with, any other insurance on which the general contractor is a named insured. Since the general contractor’s insurer paid in excess of $1million to settle the underlying action, reserving all rights on the issue of the priority of coverage, the subcontractors’ excess insurer is now obligated to reimburse the general contractor’s insurer the amount paid in connection with the settlement.

Practice Areas:
• Appellate Practice
• Insurance Coverage & Coverage Litigation