AGC Urges Court to Find Insurance Coverage for "Third-Party-Over" Action

June 11, 2018

On May 25, AGC filed a friend-of-the-court brief in the Rhode Island Supreme Court in the Bacon Construction case,  where the court will soon decide whether the standard form of the additional insured (AI) endorsement provided a general contractor’s with coverage under its it’s subcontractor’s insurance policy for a “third-party-over” action. 

At the heart of the case lies a commercial general liability policy that granted the subcontractor coverage (with certain exceptions) for bodily injuries or property damage resulting from any “occurrence” or “accident.”  The AI endorsement granted the general contractor coverage under the same policy but only for injuries or damage “caused in whole or in part” by the subcontractor’s “acts or omissions.”  The question that the case presents is whether that language cut off the general contractor’s coverage under the relevant policy for a “third-party-over” action that one of the subcontractor’s carpenters brought against the general contractor.  In that other action, the carpenter alleged that the general contractor was responsible for injuries that he suffered when he slipped and fell on an open and apparently icy stairway that the subcontractor had yet to enclose.

Last July, the Superior Court of Rhode Island held that the wording of the endorsement cut off the general contractor’s coverage.  In a somewhat murky ruling from the bench, the court emphasized that the carpenter had only alleged that the general contractor was negligent. 

The problem is that the carpenter had no reason to level an allegations against the subcontractor.  The state’s workers compensation statute precluded him from taking any legal action against his own employer.  In its legal brief, AGC acknowledges that the endorsement “does not provide insurance coverage if the loss is cause solely by the additional insured’s acts or omissions” but goes on to explain that that “it does provide coverage if the loss is potentially caused at least in part by the named insured.”  On that basis, the association urges the court to hold that the carpenter’s allegations against the general contractor “and its employees, agents or servants” were broad enough to require coverage.

For AGC, the brief also provides another excellent example of national-chapter collaboration.  Together, AGC of America and the AGC of Rhode Island studied the facts of the case and determined that it threatened the insurance coverage that general contractors should expect additional insured endorsements to provide.  Together, they also selected Jeffrey Vita at Saxe, Doernberger & Vita to write and file the brief.  Indeed, they collaborated on every step of this effort to protect the interests of the construction industry.

For more information, contact AGC’s General Counsel, Michael Kennedy, at or 703-837-5335.

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