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The Appellate Division has reversed a trial court decision ordering an insurance company to pay over $349,000 to Comcast of Garden State, LP, concluding that Comcast was not an additional insured under an insurance policy that had been issued to a Comcast contractor.

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The Case

Richard Endres filed a complaint alleging that he was injured due to the negligence of JNET and Comcast when he tripped over a temporary above-ground cable that JNET Communications, LLC, had installed while performing work as Comcast's contractor.

Comcast tendered its defense to The Hanover Insurance Company under an insurance policy Hanover had issued to JNET.

Hanover initially accepted the defense and assigned counsel to Comcast and JNET.

Comcast was dismissed from the litigation based on JNET's admission that it had placed a temporary cable on the property.

The claim against Comcast, however, was reinstated on Mr. Endres' motion after deposition testimony suggested that a Comcast technician had placed or replaced the temporary cable after the JNET employee had first placed the cable on the property where Mr. Endres had fallen.

Hanover tendered the defense back to Comcast, claiming the alleged loss “did not arise out of [JNET's] work” and, therefore, Comcast was not owed a defense under the policy.

Following a trial, the jury found Comcast 60 percent liable and JNET 40 percent liable, and awarded damages.

Comcast sued Hanover, seeking a declaratory judgment that Hanover was obligated to defend and indemnify Comcast because Comcast was an additional insured entitled to coverage under the policy.

The trial court granted Comcast's motion for summary judgment, finding that it was an additional insured entitled to a defense and indemnification under the policy. It awarded Comcast $349,468.83 in defense costs and fees.

Hanover appealed. It argued that, under the policy, Comcast was not an additional insured “with respect to” the work for which the jury found it directly liable. More particularly, Hanover noted that the policy provided that Comcast was an additional insured “only with respect to” JNET's work. Hanover contended that Comcast was not an additional insured because the jury based its finding of Comcast's liability on Comcast's direct negligence unrelated to JNET's work and not vicarious liability based on JNET work.

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The Hanover Policy

The Hanover policy provided:

Additional Insured by Contract, Agreement or Permit . . .

Any person or organization with whom you agreed, because of a written contract, written agreement or permit to provide insurance, is an insured, but only with respect to:

(1) “Your work” for the additional insured(s) at the location designated in the contract, agreement or permit . . .

The policy also provided:

“Your work”:

a. Means:

(1) Work or operations performed by you or on your behalf; and

(2) Materials, parts or equipment furnished in connection with such work or operations.

b. Includes:

(1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of “your work”, and

(2) The providing of or failure to provide warnings or instructions.

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The Appellate Court's Decision

The appellate court ruled that Comcast was not an additional insured under the Hanover policy for its own negligence.

In its decision, the appellate court explained that, under the Hanover policy, parties to which JNET agreed to provide insurance were additional insureds but “only with respect to” JNET's work.

According to the appellate court, Comcast made no showing that its liability for Mr. Endres' injuries was based on JNET's work or that the jury found it vicariously liable for JNET's negligence in the performance of JNET's work.

Instead, the appellate court pointed out, the jury apportioned liability based on JNET's and Comcast's “separate and distinct negligence.”

In the appellate court's opinion, the “plain language” of the Hanover policy did not support a finding that Comcast was an additional insured for its own negligence. The appellate court reasoned that the policy provided that Comcast was an additional insured “only with respect to” JNET's work; it did not provide that Comcast was an additional insured with respect to its own work or negligence.

In sum, the appellate court found that the Hanover policy was not ambiguous and that its plain language allowed additional insured coverage only with respect to JNET's work. Because Comcast's liability was not determined in reference to or in relation to JNET's work, Comcast was not entitled to coverage as an additional insured for its own negligent acts under the policy, the appellate court concluded.

The case is Comcast of Garden State, LP v. The Hanover Ins. Co., No. A-3245-17T4 (N.J. App. Ct. July 10, 2019). Attorneys involved include: Donnelly Minter & Kelly, LLC, attorneys for appellants/cross-respondents (Seth A. Abrams, on the briefs). Lavin, O'Neil, Cedrone & DiSipio, attorneys for respondent/cross-appellant (Michael J. Quinn, on the briefs).

Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. Mr. Meyerowitz is the Director of the Insurance Coverage Law Center and editor-in-chief of journals on insurance law, banking law, bankruptcy law, energy law, government contracting law, and privacy and cybersecurity law, among other subjects. He may be contacted at [email protected].