How you plead allegations in your lawsuit to trigger duties of a liability insurance carrier is a critical consideration.  If the complaint is not pled appropriately, it can result in the carrier NOT owing a duty to defend its insured, which is the party(ies) you are suing. If there is no duty to defend, there will be no duty to indemnify the insured to cover your damages.  For this reason, in a number of circumstances, this is NOT what you want because you want to trigger insurance coverage and potential proceeds to be paid by a carrier to cover your damages. There are times when you are confronted with a case that just is not a good insurance coverage case.  This may result in you coming up with creative arguments to maximize insurance coverage.  Even in these times, you want to plead the complaint to best maximize coverage under the creative arguments you have developed.

An example of not pleading allegations in a complaint to trigger an insurer’s duties can be found in the Eleventh Circuit Court of Appeal’s decision in Tricon Development of Brevard, Inc. v. Nautilus Insurance Co., 2021 WL 4129373 (11th Cir. 2021).   This case involved a general contractor constructing condominiums.  The general contractor hired a subcontractor to fabricate and install metal railings.  The subcontractor had a commercial general liability (CGL) policy that named the general contractor as an additional insured with respect to liability for property damage “caused in whole or in part” by the subcontractor’s direct or vicarious acts or omissions.  (This is a good additional insured endorsement.)

A dispute arose as to defective work by the subcontractor in fabricating and installing the railings.  The general contractor, therefore, engaged another subcontractor to fabricate new railings and remove the current railing to install the new ones. The general contractor submitted a claim to its original railing subcontractor’s insurer.  The insurer denied the claim and the general contractor filed a coverage action against the insurer as an additional insured under the CGL policy.

The problem, however, is that the general contractor’s complaint did not appear to truly consider insurance coverage, although it appeared to be a case where insurance coverage was not a great option.   The Eleventh Circuit explained there was no coverage based on the allegations in the complaint:

Here, [the general contractor] alleges that the subcontractor’s railings were deficient due to having defects and damage, not being installed properly, and not satisfying the project’s specifications; it does not allege that the subcontractor’s faulty workmanship damaged otherwise non-defective components of the project…. Thus, the costs that [the general contractor] incurred in removing the subcontractor’s railings and the fabrication and installation of new railings do not constitute “property damage” under the policies….

Tricon Development of Brevard at *2.

This is obviously not what the general contractor wanted and had it pled allegations differently, the outcome may have turned out different.  Although, the general contractor may have been faced with trying to come up with a creative argument recognizing it was not a great insurance coverage action.

Nonetheless, the Eleventh Circuit, finding there was no insurance coverage, includes a worthy paragraph when it comes to property damage in a construction defect/damage dispute so that parties recognize CGL policies do not cover defective workmanship. Take note of this discussion so that you can ensure allegations are pled to best maximize coverage:

The policies at issue in this appeal are post-1986 standard form commercial general liability policies with products-completed operations hazard coverage, which are governed by Florida law. We have held that such policies do not cover the costs of replacing defective products. In Amerisure Mutual Insurance Company v. Auchter Company, we examined a post-1986 standard form commercial general liability policy with products-completed operations hazard coverage. That policy “define[d] ‘property damage’ as ‘physical injury to tangible property, including all resulting loss of use of that property … or … loss of use of tangible property that is not physically injured.’ ” 673 F.3d 1294, 1298 (11th Cir. 2012) (cleaned up). Applying Florida law, we held that “there is no coverage if there is no damage beyond the faulty workmanship, i.e., unless the faulty workmanship has damaged some otherwise nondefective component of the project.” Id. at 1306 (citing U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979 So.2d 871, 889 (Fla. 2007)). We also held that “if a subcontractor is hired to install a project component and, by virtue of his faulty workmanship, installs a defective component, then the cost to repair and replace the defective component is not ‘property damage.’ ” Id. (citing Auto-Owners Ins. Co. v. Pozzi Window Co., 984 So.2d 1241, 1248 (Fla. 2008)). We further held that “nondefective and properly installed raw materials can constitute a defective project component when the contract specifications call for the use of different materials, yet the cost to reinstall the correct materials is not ‘property damage’—even though the remedy for such a nonconformity is to remove and replace that component of the project.” Id. (citing Pozzi, 984 So.2d at 1248).

Tricon Development of Brevard at *2.


Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.



CGL policies contain a “Separation of Insureds” provision.  This provision oftentimes states:

Except with respect to the Limits of Insurance, and any rights or duties specifically assigned this Coverage Part to the first Named Insured, this insurance applies:

1. As if each named insured were the only Named Insured; and

2. Separately to each insured against whom claim is made or “suit” is brought.

This provision is designed to “create separate insurable interests in each individual insured under a policy, such that the conduct of one insured will not necessarily exclude coverage for all other insured.”  Evanson Ins. Co. v. Design Build Interamerican, Inc., 569 Fed.Appx. 739 (11th Cir. 2014).  This provision also allows one insured under the policy (e.g., additional insured) to sue another (e.g., named insured) without violating potential coverage because there are separate insurable interests.   This is a valuable provision in CGL policies.

The case of Taylor v. Admiral Ins. Co., 187 So.3d 258 (Fla. 3d DCA 2016) exemplifies the application of the Separation of Insureds provision, particularly when there is an additional insured.  In this case, a person attended an event at a location owned by Miami-Dade County that was hosted by her employer.  As she was leaving the event, she slipped and injured herself.   Her employer had a CGL policy that had a blanket additional insured endorsement that made the County an additional insured.  The employee, through a Coblentz agreement entered into with the County (since the CGL carrier refused to tender a defense to the County) sued her employer’s CGL policy for coverage as an assignee of the County.   The CGL carrier argued that the employer’s liability exclusion precluded CGL coverage.  The employer’s liability exclusion, in a nutshell, precludes coverage for bodily injury claims from the insured’s employees, subcontractors, etc.  This exclusion can be modified by endorsement that expands the scope so keep an eye out on this endorsement.

The Third District Court of Appeal held that the Separation of Insureds provision precluded the application of the employer’s liability exclusion as to the additional insured. The Separation of Insureds provision allowed coverage for the employee’s claim against the County (an additional insured) since the County had a separate insurable interest under the policy.  Since the County was not the employee’s employer, and under the Separation of Insureds provision the County was separately insured under the policy, the employer’s liability exclusion did not apply to the County as an additional insured.

Notably, other cases around the country, that have modified the employer’s liability exclusion through endorsement, have come up with a different conclusion.

Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.



Recently, I participated in a webinar involving the horizontal and vertical exhaustion of insurance coverage.  Say what?

This pertains to the PRIORITY of liability insurance coverage and the interface between a general contractor’s (or upstream party’s) primary insurance and the subcontractor’s (or downstream party’s) excess insurance, particularly when the general contractor is required to be indemnified by the subcontractor and named as an additional insured under the subcontractor’s liability policies.

For instance, let’s assume the general contractor has a $2M primary policy and a $5M excess policy.  Its subcontractor has a $1M primary and a $5M excess policy. The general contractor is an additional insured under the subcontractor’s policies and the subcontractor is required to contractually indemnify the general contractor.  An issue occurs caused by the subcontractor’s negligence resulting in a $5M judgment against the general contractor and the subcontractor.

A. Horizontal Exhaustion

Under the horizontal exhaustion approach, the court will look primarily to the “other insurance” provision in the policies–specifically, the subcontractor’s excess policy–which will take precedence over the contractual indemnification language. Since the “other insurance” provision in excess policies typically state it is excess over the exhaustion of primary policies, under the horizontal exhaustion approach, the policies would be exhausted as follows relative to the $5M judgment:

1) $1M from subcontractor’s primary policy;
2) $2M from general contractor’s primary policy; and
3) $1M from the general contractor’s excess policy and $1M from the subcontractor’s excess policy, as the excess policies share in coverage after the primary coverage is exhausted.

The general contractor and its insurers do not perceive this to be equitable as it dilutes the indemnification and additional insured requirement. Further, it results in the general contractor’s carriers subrogating to the rights of the general contractor to pursue a separate action against the subcontractor, which gets sent right back to the subcontractor’s excess insurer (as its primary insurance was exhausted) for reimbursement.  Under the above example, the subcontractor’s excess insurer still had a remaining $4M in coverage to reimburse the general contractor’s primary and excess insurer.  This is known as a circular chain of events because the priority of coverage under horizontal exhaustion invariably results in a separate subrogation claim for reimbursement.

B. Vertical Exhaustion

Under the vertical exhaustion approach, the court will look primarily to the contractual indemnification and additional insured language, irrespective of the “other insurance” provision in the excess policy, to avoid the circular chain of events with the general contractor’s carriers pursuing a separate subrogation claim. Under the vertical exhaustion approach, the policies would be exhausted as follows relative to the $5M judgment:

1) $1M from the subcontractor’s primary policy; and
2) $4M form the subcontractor’s excess policy.

The subcontractor’s primary and excess policies would be exhausted BEFORE the general contractor’s primary policy comes into play.  This is designed to avoid the the separate subrogation claim since the subcontractor’s insurance coverage is being exhausted first.

C. Priority of Insurance Coverage

The priority of insurance coverage can become a very significant consideration in sizable claims.  There is a reason parties contractually negotiate insurance coverage in the contract.  For this reason, during the contract negotiation, it is important to appreciate this consideration on the frontend. Consult with counsel and an insurance broker as to the following:

 The contractual indemnification language – make sure it is enforceable in your jurisdiction;
 The additional insured language and applicable insurance endorsements – make sure you get the right endorsement for ongoing and completed operations that covers issues wholly or partially caused by the subcontractor’s (or downstream party’s) negligence;
 The primary and noncontributory language and applicable endorsements in the primary and excess policy-this modifies the “other insurance” provision from a priority of coverage standpoint and you want this in both the primary policy and excess policy; and
 The “other insurance” language in the general contractor’s (or upstream party’s) policy — the objective is to maximize vertical exhaustion of coverage to avoid the circular chain of events discussed above so this may result in manuscript language to the general contractor’s “other insurance” language to reflects its priority.

Claims that involve or rely on construction insurance claim can become complex.  But, insurance is crucial in order to properly assess risk, flow down risk, and manage risk.   In order to evaluate associated risk, it requires consultation with lawyers and insurance brokers and understanding the type of claim exposure relative to the project, and maximizing value of insurance–primary and excess insurance–for which you are an additional insured.

Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.



UnknownIn prior articles, I reinforced the importance of general contractors including “primary and noncontributory” language in subcontracts and requiring the subcontractor to provide an analogous “primary and noncontributory” endorsement.   As a general contractor this is important, particularly since you are going to require the subcontractor to (i) indemnify you for claims relating to personal injury, property damage, or death, and (ii) identify you as an additional insured under its commercial general liability (CGL) policy for claims arising out of the subcontractor’s scope of work.   The “primary and noncontributory” language in your subcontracts allows you to maximize the value of your additional insured status.  


A recent opinion explains why I reinforced the importance of this language.


The case of Zurich American Insurance Co. v. Amerisure Ins. Co., 2017 WL 366232 (S.D. Fla. 2017) involved an underlying construction defect lawsuit where a condominium association sued a general contractor.    The general contractor hired subcontractors and required them to identify the general contractor as an additional insured.   This is all routine, right?  A few of the subcontractors had CGL policies issued from the same insurer (Amerisure).  They contained the same additional insured endorsement that included the following “other insurance” clause:


Any coverage provided in this endorsement is excess over any other valid and collectible insurance available to the additional insured whether primary, excess, contingent, or on any other basis unless the written contract, agreement, or certificate of insurance requires that this insurance be primary, in which case this insurance will be primary without contribution from such other insurance available to the additional insured.


When the general contractor was sued it, as it should, tendered the defense of the lawsuit to the responsible subcontractors as an additional insured under their policies demanding both a defense and indemnification from the association’s claims.  The insurer, however, refused to defend the general contractor.  The general contractor’s insurer (Zurich) defended the general contractor in the action. 


Thereafter, the general contractor’s CGL insurer sued the subcontractors’ CGL insurer.  (The general contractor had also assigned its additional insured rights under the policies to its CGL insurer.)  The general contractor’s CGL insurer was seeking reimbursement for the attorney’s fees and costs expended in the defense of the general contractor in the underlying construction defect lawsuit.  The subcontractors’ CGL insurer moved to dismiss the claims based on the clause above—that the subcontractors’ CGL insurance operated as excess insurance over the general contractor’s CGL insurance.  In other words, the subcontractors’ CGL insurance was not primary and noncontributory.  There was no allegation that the subcontract included language requiring the subcontractor’s CGL insurer to be primary and noncontributory. 


The first reason this is an important point is because “when an insurance policy defines its coverage as secondary or “excess” to a primary policy, the excess insurer has no duty to defend the insured—so long as the primary policy provides for a defense and its coverage has not been exhausted.”  Zurich American Ins. Co., supra, at *4.    If the subcontractors’ CGL policy is excess, then than their CGL insurer does not have a duty to defend if the primary policy is not exhausted.   This means they have no duty to defend the additional insured – not very helpful to a general contractor tendering the defense of the claim to responsible subcontractors. 


The second reason this is an important point is because of what is known between liability insurers as the anti-contribution rule:


Florida courts have consistently held that, once the duty to defend is activated, every subject insurer assumes it on a personal and indivisible basis. That means that when an insured tenders a claim to multiple insurance providers, the entity that actually engages in the defense and incurs the fees and costs associated with it cannot subsequently seek contribution or equitable subrogation from the fellow insurer who “lagg[ed] behind.”

Zurich American Ins., Co., supra, at *5 (internal citations omitted).


Since the general contractor’s CGL insurer bore the costs of the general contractor’s defense in the construction defect lawsuit, it cannot now divvy up the defense fees and costs to other insurers that may have had a similar obligation unless an exception to this rule applies (see below).


The third reason this is an important point is because there is an exception to this anti-contribution rule:


A “responsive” insurer who complied with its insured’s tender for defense can extract reimbursement from the “nonresponsive” insurer when the insured had separately contracted with another entity, itself an insured of the nonresponsive carrier, to indemnify the first insured. The logic of the exception is that the insured parties’ express decision to “shift[ ] exposure” from one to the other is imputed to the insurer relationship and overcomes the general anti-contribution principle.

Zurich American Ins., Co., supra, at *8 (internal citations omitted). 



Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.



imagesSince insurance, particularly liability insurance, is such an important component when it comes a construction project, understanding certain nuances such as a Coblentz Agreement (a what kind of agreement agreement?!?—keep reading) becomes helpful.  


If there is a construction defect claim / lawsuit, the implicated parties (e.g., contractor, design professional, subcontractor, sub-consultants) are going to tender the claim / lawsuit to their respective liability insurer.  This is what they should be doing – notifying the insurer so that the insurer can defend them from the claim / lawsuit and indemnify them from covered damages associated with the claim / lawsuit.  


And, if a contractor is an additional insured under an implicated subcontractor’s liability policy, it is going to demand that the insurer defend it (or share in the defense costs with other implicated subcontractors) and indemnify it based on the negligence of the primary insured-subcontractor.


This is all par for the course in a construction defect lawsuit–really, any construction defect lawsuit.


But, there may come a point where a liability insurer denies coverage meaning they are declining to defend their insured in connection with the claim / lawsuit.    In this situation, the claimant may consider entering into a Coblentz agreement with the insured.  This was the topic in a recent non-construction case in In Re: The Estate of Jorge Luis Arroyo, Jr. v. Infinity Indemnity Insurance Co., 42 Fla. L. Weekly D192a (Fla. 3d DCA 2017), when a personal injury negligence lawsuit was brought against an Estate as the result of a deadly car accident.  The Estate tendered the defense of the negligence lawsuit to the decedent’s insurer, but the insurer declined to defend the Estate of the insured.  The Estate and the personal injury claimant then entered into a Coblentz agreement where the Estate (1) agreed to a consent judgment entered against it, (2) assigned its rights under its liability policy to the claimant, and (3) the claimant agreed not to pursue the consent judgment against the insured.  The Coblentz agreement and consent judgment gave the claimant a path to sue the insured’s liability insurer based on the liability against the insured as set forth in the consent judgment.  (The consent judgment establishes the liability of the insured.)


In order to enforce a consent judgment entered pursuant to a Coblentz agreement, the assignee [claimant] must bring an action against the insurer and prove: (1) insurance coverage, (2) the insurance company wrongfully refused to defend its insured, and (3) the settlement was reasonable and made in good faith.”  In Re: The Estate of Jorge Luis Arroyo, Jr. supra.


[W]hen an insurer refuses to defend its insured from a lawsuit, and the insured later settles the suit by entering into a Coblentz agreement, the insurer is precluded from relitigating the issue of its insured’s liability in subsequent proceedings.”  In Re: The Estate of Jorge Luis Arroyo, Jr. supra.   Stated differently, the insurer is precluded from later raising defenses on behalf of its insured that it could have previously raised had it simply defended its insured. 


In this case, the insurer ultimately tried to intervene in an underlying lawsuit once it was sued per the Coblentz agreement.  Although the trial court permitted this intervention, the appellate court reversed because the insurer couldn’t relitigate issues it could have raised had it not declined to defend its insured– it was this declination that gave rise to the Coblentz agreement in the first place.   The consent judgment established the insured’s liability to the claimant; thus, the issues to determine were (1) was there coverage, (2) did the insurer wrongfully refuse to defend the insured; and (3) was the settlement reasonable.  As this case shows, sometimes a claimant needs to consider entering into a Coblentz Agreement to pursue recourse against an insurance policy.


Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.


images-1As a general contractor, you understand the importance of being named an additional insured under your subcontractors’ commercial general liability (CGL) policies.   Not only do you want your subcontract to express that a subcontractor’s CGL policy is primary and noncontributory to your policy, but you want it to express that the subcontractor must identify you as an additional insured for ongoing and completed operations.  Even with this language, you want the subcontractor to provide you with their additional insured endorsement and, preferably, a primary and noncontributory endorsement.    These additional insured obligations are important to any general contractor that has been sued in a construction defect / property damage lawsuit.


In the recent decision in Core Construction Services Southeast, Inc. v. Crum & Forster Ins. Co., 2016 WL 5403578 (11th Cir. 2016), a general contractor built a residential development.  The general contractor required its roofing subcontractor to identify it as an additional insured under the roofer’s CGL policy.   The general contractor was sued with the lawsuit asserting that the roofs were installed incorrectly.  The general contractor tendered the defense of the claim to the roofer’s CGL insurer and the insurer refused to provide the defense because there was no “property damage” within the definition of the CGL policy (“physical injury to tangible property…”).    The general contractor then filed a lawsuit against the subcontractor’s insurer arguing that the insurer was obligated to defend and indemnify it since the general contractor was an additional insured under the subcontractor’s CGL policy.  The trial court, and as affirmed by the Eleventh Circuit Court of Appeal, held that the insurer owed no duty to defend or indemnity the general contractor because there was NO asserted property damage within the meaning of the policyIf there was no property damage then there was no obligation for the roofing subcontractor’s insurer to defend the general contractor as an additional insured under the subcontractor’s CGL policy. 


The underlying lawsuit only claimed that the roofs had been damaged but did NOT claim that the defective roofs had caused damage to other property (other components of the building).  The omission of this assertion was important because the complaint was not pled to trigger insurance duties, such as additional insured obligations, since the cost to repair or replace the damaged roof would not be covered by the subcontractor’s CGL insurer.  Rather, costs to replace or repair damage caused by the subcontractor’s defective roofing installation would be covered; however, such damage was not pled in the underlying complaint.   Remember, the insurer’s duty to defend is only triggered based on allegations in the underlying complaint so without such allegations, there is no duty


Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.



imagesHave you ever looked at your CGL policy and seen the “Separation of Insureds” provision? You must have seen it but perhaps it does not ring a bell.  If you are an additional insured under another’s policy or have additional insured under your policy, this is an important provision.  Check out this article to understand the application of the “Separation of Insureds” provision in your CGL policy. 



Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.



images-1If you are an owner and discover construction or design defects, you are going to want consult with a lawyer to make sure you know your rights under Florida Statutes Chapter 558.  This includes sending a written notice of the construction or design defects identifying the defects with sufficient detail to the potentially responsible parties.  Likewise, if you are a contractor and receive this written notice, you are going to want to make sure you forward that letter to potentially responsible parties (subcontractors or suppliers). 


Coupled with this written notice of defects letter should be a written request on the parties and their known insurance agents and insurers for their liability insurance information.  Start with culling Certificates of Insurance you have on these parties to obtain (some) of this information as to whom to send the request to.  This request can be in a separate letter or the same letter (as the notice of defects letter) and should reference Florida Statute s. 627.4137 and request the information in the below statutory language:


(1) Each insurer which does or may provide liability insurance coverage to pay all or a portion of any claim which might be made shall provide, within 30 days of the written request of the claimant, a statement, under oath, of a corporate officer or the insurer’s claims manager or superintendent setting forth the following information with regard to each known policy of insurance, including excess or umbrella insurance:

(a) The name of the insurer.

(b) The name of each insured.

(c) The limits of the liability coverage.

(d) A statement of any policy or coverage defense which such insurer reasonably believes is available to such insurer at the time of filing such statement.

(e) A copy of the policy.

In addition, the insured, or her or his insurance agent, upon written request of the claimant or the claimant’s attorney, shall disclose the name and coverage of each known insurer to the claimant and shall forward such request for information as required by this subsection to all affected insurers. The insurer shall then supply the information required in this subsection to the claimant within 30 days of receipt of such request.


As discussed in prior articles, insurance is an important aspect of construction and design defect disputes. 


If you are an owner, you want to understand potential insurance coverage so that you know how to best maximize any claim for insurance coverage against potentially liable parties.  This includes knowing the limits of liability in any commercial general liability (CGL) or professional liability / errors & omissions policy, as applicable, and whether there is any umbrella / excess policy.  This also includes understanding the exclusions in the policies and whether there are endorsements that add or modify exclusions in the policy.


If you are a general contractor, you also want to understand potential insurance coverage from subcontractors and other entities you are looking to flow-down an owner’s defect claims (ideally, through contractual indemnification language in your subcontract).  Also, you are going to want to make sure you have additional insured status under these parties’ liability policies so that they contribute to the fees and costs incurred in your defense.  For this reason, you also want to obtain copies of subcontractor insurance polices including all endorsements.  Besides the limits of liability, you want to see the additional insured endorsement in the policy, and any endorsements that add or modify exclusions in the policy. 


If you are a subcontractor, if you subcontracted aspects of your scope of work or there is a claim associated with deficient material you furnished, you also want to obtain this insurance information from these potentially liable entities because you are also going to try to flow-down liability (ideally, through contractual indemnification language in your subcontract).


And, if you are a manufacturer, if a claim is asserted against you arising out of the installation of that product, you also want to obtain insurance information from any authorized dealer or installer (perhaps through any agreement you have with that dealer or installer that would require this entity to indemnify you and name you as an additional insured).  


One of the underlying reasons for s. 627.4137 is so that parties can obtain insurance coverage information and make reasonably informed decisions about settling a matter.  In other words, you don’t want to settle a dispute for policy limits if you have damages that may exceed policy limits and find out the responsible party has additional or excess insurance to cover the excess damages. See, e.g., Schlosser v. Perez, 832 So.2d 179 (Fla. 2d DCA 2002) (in non-construction case, noncompliance with s. 627.4137 rendered settlement unenforceable). But, this statute does not create a private cause of action by a third-party if an insurer fails to timely provide this information. Any potential recourse the third-party would have, if any, against the insurer would have to be after the third-party obtains a judgment against the underlying insured. Lucente v. State Farm Mut. Auto. Ins. Co., 591 So.2d 1126, 1127-28 (4th DCA 1992) (“[T]he statute does not contain an implicit cause of action for a third-party against an insurance company.”);  see also Brannan v. Geico Indemnity Co., 569 Fed.Appx. 724, 728 (11th Cir. 2014)  (“But Brannan fails to point to any legal authority to show that s. 627.4137 creates a first-party private cause of action against an insurer [for failure to comply with the statute.]”).


Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.



CaptureIf you were ever involved in a construction defect claim or lawsuit, you may have heard the phrase “primary and noncontributory” when referring to YOUR insurance coverage.  Or, you may have come across this phrase when discussing with your insurance broker the additional insured insurance coverage requirements you need to provide pursuant to your contract.


But, what does this mean when referring to YOUR insurance coverage? This phrase refers to the priority of YOUR insurance coverage.


For instance, a general contractor will require that that its subcontractors obtain CGL insurance coverage that not only names the general contractor as an additional insured (for both ongoing and completed operations), but also includes an endorsement reflecting that the subcontractor’s policy is “primary and noncontributory.”  (See above picture for example of endorsement)   The subcontract may provide, by way of example, that, “Insurance coverage provided by you [subcontractor] to the additional insured [general contractor] shall be primary and noncontributory with respect to any insurance coverage otherwise available to the additional insured.”  This means that if the general contractor is sued associated with the negligence of its subcontractor, it will tender the claim to the subcontractor’s insurer to defend and indemnify it since it will (hopefully) be an additional insured under the policy.  The subcontractor’s policy is the “primary” policy without contribution from the general contractor’s policy (as the general contractor’s policy will really come into play as excess insurance).


otherThe general contractor, to be safe and circumspect, may want the subcontractor to obtain a “primary and noncontributory” endorsement that says that the subcontractor’s insurance will be primary and noncontributory when required by written contract.  The reason this is safe is because most CGL policies already contain a section called “Other Insurance.” In this section (as depicted in part in the adjacent picture), the policy will state that it is primary except when other insurance (specified in the policy) is available in which case it will serve as excess insurance.  One of the other insurance conditions that will deem your policy as excess is when you are identified as an additional insured under another’s policy (e.g., the subcontractor’s policy that identifies the general contractor as an additional insured is the primary policy and the general contractor’s policy will serve as excess insurance). The primary and noncontributory endorsement modifies this “Other Insurance” language.



Understanding the application of insurance and the interrelationship of potential policies is never easy.  But, this understanding is of the utmost importance for construction risk assessment purposes where risk is inherent in the very nature of construction.




Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.



images-1Additional Insured status is a vital part of risk management in construction.  I’ve previously discussed additional insured status under general liability policies in and


 The recent decision in King Cole Condominium Association, Inc. v. Mid-Continent Casualty Co., 2014 WL 2191944 (S.D.Fla. 2014), further elaborates on additional insured status under a general liability (CGL) policy.  In this case, a condominium unit owner injured herself while the condominium was undergoing construction work.  The unit owner sued the association and the general contractor the association hired to perform the work.  As it pertained to the association, the unit owner contended that the association was negligent including being negligent for selecting the general contractor that caused her injuries.  The general contractor, as typically is the case, had a CGL policy.  The association tendered the defense of the unit owner’s claims to the contractor’s liability insurer as an additional insured; however, the insurer denied coverage. The association then sued the insurer seeking a declaratory judgment asking for the court to declare that it was an additional insured under the contractor’s policy and, thus, the insurer had a duty to defend and indemnify the association in the unit owner’s action against the association and general contractor.


The dispositive issue in this dispute was whether the association should qualify as an additional insured under the general contractor’s liability policy. The association claimed it was an additional insured because any liability assessed against it was directly attributable to the defective condition created by the general contractor that caused the unit owner’s injuries.  The insurer countered that the association would only qualify as an additional insured with respect to liability directly attributable to the general contractor’s performance at the condominium.


The additional insured endorsement in the contractor’s policy provided that an additional insured was:



“Any person or organization for whom the named insured has agreed by written “insured contract” to designate as an additional insured subject to all provisions and limitations of this policy …


WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability directly attributable to your performance of ongoing operations for that insured.”


The general contractor’s liability policy further contained a definition for the term “insured contract” that provided:


“f. That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization, provided the “bodily injury” or “property damage” is caused, in whole or in part, by you or by those acting on your behalf. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.”



Based on this policy language, the Southern District stated that for the association to qualify as an additional insured under the general contractor’s policy, it must establish (a) its contract with the general contractor was an insured contract within the meaning of the policy and (2) the association only sought coverage as an additional insured under the policy regarding liability directly attributable to the general contractor’s performance, i.e., the additional insured status is for vicarious liability or negligence directly caused by the contractor for which the association was sued.  If the association failed to provide either requirement, then it failed to qualify as an additional insured.


The contract between the association and general contractor provided that the general contractor would identify the association as an additional insured.  Presumably, this contract met the definition of an insured contract within the meaning of the policy as it likely required the contractor to indemnify the association for bodily injury and property damage caused by the contractor’s performance.  Thus, the crux of whether the association qualified as an additional insured under the contractor’s policy turned on whether the unit owner was suing the association for liability directly attributable to the general contractor’s performance (i.e., vicarious liability).



To determine whether the unit owner’s claims contained allegations triggering vicarious liability, the Southern District looked to the allegations in the unit owner’s underlying complaint against the association and contractor.  In analyzing the unit’s owner complaint and finding that the association did not qualify as an additional insured, the Southern District held:



Florida law requires a claimant to specifically plead vicarious liability as a separate cause of action.  Because Satarsky’s [unit owner] complaint contains no separate cause of action for vicarious liability, the Court rejects King Cole’s [association] contention. Furthermore, even if Florida procedural law did not apply or if the separate cause of action requirement was not the law in Florida, there is nothing in the complaint to suggest that Satarsky sued King Cole for vicarious liability. To the contrary, the allegations against King Cole all relate to its own alleged negligence. Therefore, under the facts here, Mid–Continent has no duty to defend or indemnify King Cole with respect to the Satarsky lawsuit.”

King Cole Condominium Association, supra (internal citations omitted).  


This case contains a couple of important take-aways:


  • Additional insured status is not designed to protect the additional insured for its OWN negligence.  Rather, it is designed to defend and indemnify the additional insured for the negligence directly caused / attributable to the primary insured; hence, the Southern District explaining that the underlying complaint  by the unit owner needed to trigger vicarious liability such that the association was being sued for the negligence of the contractor.


  • To determine whether an insurer has a duty to defend, the court will look to the allegations in the underlying complaint.  In this instance, the underlying complaint asserted claims against the association for its own negligence, but not for  vicarious liability  associated with the negligence of the contractor.   When preparing a complaint in which a party is seeking insurance coverage, it is important to plead allegations that may give rise to potential coverage.


Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.