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No Coverage For Additional Insured For Underlying Personal Injury Complaint Alleging Independent Negligence Rather Than Vicarious Liability

Pekin sought a declaration that it did not have a duty to defend a property owner who was named as an additional insured on a policy issued to a contractor. A contractor’s employee was injured and filed suit against the property owner alleging various acts of negligence. The owner tendered its defense to Pekin which denied coverage because the allegations of the complaint alleged independent negligence rather than vicarious liability. Pekin then filed a declaratory judgment action asserting no coverage because the policy provided the owner would be "covered only with respect to vicarious liability…" The trial court entered summary judgment for Pekin.

The Third District affirmed. The underlying complaint alleged solely direct negligence of the owner regarding the construction and operation of the area where the worker was injured. Therefore, the trial court properly found the language of the insurance policy did not include coverage for direct negligence. Pekin Ins. Co. v. Illinois Cement Co. LLC, 2016 IL App (3d) 140469.

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Success in litigating insurance coverage issues hinges on understanding both the interpretation of insurance policies and the handling of claims. These key elements pervade every phase of the business from taking the application, through underwriting, and policy issuance. The members of our firm's insurance coverage practice group understand these elements and the important role they play in risk management.