It is a common occurrence for multiple insurance policies to be applicable in a personal injury suit resulting from an accident on a construction site. Often both primary and excess policies contain conflicting language, have similar priority designations and provide coverage to several parties. Litigation arises when conflicting or similarly worded policies are used by a carrier in an attempt to gain “upstream” status to avoid paying out under its policy. Further, most construction contracts require a “downstream” party, such as a subcontractor, to indemnify or insure “upstream” parties, usually the general contractor or owner. This can make determining the priority of insurance coverage a complicated yet important task.
Where to Begin
When determining the priority of insurance in construction accident cases, a good starting point is B.P. Air Conditioning. v. One Beacon Ins.,1 where the Court of Appeals held that “[i]n order to determine the priority of coverage among different policies, a court must review and consider all of the relevant policies at issue.”2 A review of the underlying policies consists of a comparative analysis of the expectations of the parties when contracting, the premium paid, the stated coverage and the wording of “other insurance” clauses.
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