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(Article from Insurance Law Alert, January 2018)

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Affirming a Georgia federal district court decision, the Eleventh Circuit ruled that an additional insured endorsement provides coverage only when underlying liability was caused in whole or in part by the named insured.  Employers Mutual Cas. Co. v. Shivam Trading, Inc., 2018 WL 365216 (11^th Cir. Jan. 11, 2018).

Shivam leased a store from Sidhi Investment Corporation.  Both parties were sued in a slip-and-fall injury suit, but the claims against Sidhi were dismissed on summary judgment.  Shivam sought additional insured coverage under a policy issued to Sidhi.  The insurer denied coverage on the basis that the underlying claims were outside the scope of coverage provided by the additional insured endorsement.  A Georgia district court agreed and granted the insurer’s summary judgment motion.  The Eleventh Circuit affirmed.

The additional insured endorsement provides coverage for parties listed as additional insureds, “but only with respect to liability . . . caused, in whole or in part, by your acts or omissions  . . .  or in connection with your premises owned by or rented to you.”  The parties disputed the meaning of “you” and “your” in the endorsement.  Shivam argued that those terms are ambiguous as to whether they refer only to Sidhi as the named insured, or to Shivam (as an additional insured as well).  In contrast, the insurer contended that “you” and “your” refer only to the named insured, as expressly stated in the policy’s preamble.  The court agreed with the insurer, holding that the policy unambiguously limits additional insured coverage to liability caused in whole or in part by Sidhi, the named insured.  Because Sidhi was found not liable for the underlying personal injury, the court held that the insurer had no duty to defend Shivam as an additional insured.