In Harmon Cove IV Condominium Association Inc v. Indian Harbor Insurance Company, 2023 U.S. Dist. LEXIS 71960 (2023), the US District Court for the District of New Jersey held that Scottsdale Insurance Co. had no duty to provide coverage to a condominium association and its pool maintenance company for its negligence in allowing a maintenance worker to fall while working in the course of his employment. The judge ruled that the “Injury to Worker Exclusion” provision contained in the Scottsdale excess insurance policy applied.
The court recognized that an insurance policy is a contract “between parties who are not equally situated,” due to the fact that it is generally “prepared unilaterally by the insurer” and the insured’s “understanding is often impeded by the complex terminology used.” Therefore, when a language in the provisions of an insurance policy “fairly supports two meanings,” courts are to construe the policy “to comport with the reasonable expectations of the insured.”
Due to the lack of ambiguity in the policy, the Court ruled that Scottsdale is not obligated to defend or indemnify, as the plain terms of the Injury to Worker Exclusion were evident, and all plaintiffs’ claims against Scottsdale were subsequently dismissed. The primary takeaway from this case is that specific and clear language in an additional insured endorsement outlining the conditions for coverage is essential in determining additional insured coverage under a contractor’s policy.
Thanks to Matthew Staniloff for his contribution to this post. Please contact Heather Aquino with any questions.