Insurer Granted Summary Judgment against General Contractor where Contract between Subcontractor and Injured Worker’s Firm Fails to Meet Indemnification Requirements

Connolly Bros., Inc. v. Nat’l Fire & Marine Ins. Co., Civ. No. 06-11673-NG, 2008 WL 5423198 (D. Mass. Sept. 30, 2008)

In this case, the Federal District Court for the District of Massachusetts granted an insurer’s motion for summary judgment on a general contractor’s claim for indemnification and for unfair and deceptive practices under M.G.L. c. 93A, because the general contractor was not covered for the relevant incident by the insurer’s policy.

During construction, a worker fell from scaffolding and was injured on the general contractor’s construction site.  The general contractor had subcontracted with a company to perform drywall work on the project, and the subcontractor, in turn, subcontracted a portion of that work to the injured worker’s firm.  Prior to the incident, the subcontractor added the general contractor as an “additional insured” to its policy with the defendant insurer.  This litigation arose when the subcontractor’s insurer refused to defend or indemnify the general contractor in the injured worker’s action on the basis that there was an applicable exclusion, and in the alternative, that any obligation to defend or cover the general contractor would only exist if liability exceeded the general contractor’s own insurance.

The court ruled that the insurer was entitled to summary judgment based on the plain language of its policy, and the sub-subcontract between the drywall subcontractor and the injured worker’s firm.  Even though the drywall subcontractor was required to add the general contractor as an “additional insured” on its policy with the defendant insurer, the sub-subcontract between the drywall subcontractor and the injured worker’s firm failed to meet the indemnification requirements that would have brought the injured worker’s action within the plaintiff’s coverage.  The court granted summary judgment in favor of the insurer on that ground alone.  Furthermore, even if the indemnification requirements had been met, the court determined that the insurer would have owed the general contractor coverage only in excess of the primary coverage afforded by its own policy.  Because the denial of coverage did not constitute an unfair or deceptive business practice, M.G.L.c. 93A was not implicated, and the insurer was entitled to summary judgment on that claim as well.