Johnson & Bell Shareholder, Glenn F. Fencl, received summary judgment in favor of his client in a complex insurance coverage case in the United States District Court for the Northern District of Illinois.
Mr. Fencl represented an insurer which issued Commercial General Liability (CGL) and Employers’ Liability (EL) policies to its insured. The named insured was an Illinois company that provided laborers to companies in a number of states. While working on a project in New York, an employee of the named insured was injured and filed suit against numerous parties that were working on the site. One of these parties filed a Third Party Complaint against the named insured, which then sought coverage for the lawsuit under its CGL policy and EL policy. Mr. Fencl filed a declaratory judgment action in the Northern District of Illinois, seeking a declaration that his client had no duty to defend or indemnify its named insured for the claims asserted in the Third Party Complaint.
Under the CGL Policy, Fencl argued that the Employer’s Liability exclusion precluded coverage for the Third Party Complaint, because the injured person was an employee of the named insured and the “insured contract” exception to the exclusion did not apply, because the agreement between the named insured and the contractor did not include an agreement that the named insured would indemnify the contractor for the contractor’s own negligence. The Court agreed with Mr. Fencl, holding that the contract at issue did not contain any language indicating that the named insured would provide indemnity for others’ own negligence, and therefore that it was not an “insured contract”.
Under the EL policy, coverage for the named insured was limited to work performed in certain states, which did not include New York. However, the policy also included a coverage part titled “Other States Insurance” which provided that if the named insured begins work in any state after the effective date of the policy and is “not insured or self-insured for such work, all provisions of the policy will apply . . .” Fencl argued that a separate EL policy issued by the New York State Insurance Fund to the named insured clearly showed that the named insured was separately insured for its work at the site where the injuries to its employee occurred. The Court agreed, holding that the named insured had other insurance that applied, and therefore that no coverage was available under the policy issued by Fencl’s insurance carrier client.
Since there was no coverage available under either the CGL policy or EL policy, the court granted Fencl’s Motion for Summary Judgment, and entered a judgment in favor of his client that it had no duty to defend or indemnify the named insured.