One of the LinkedIn Groups I subscribe to is on Insurance Coverage, where I found this post last week:

Massachusetts Superior Court Decision Addresses Additional Insured Coverage

The court decision is discussed in this blog post from the Anderson Krieger law firm:

Does an Additional Insured Get Coverage When the Named Insured Has Done Nothing Wrong?

I can’t count the number of times in an email, article, seminar, or webinar when I’ve pointed out that, under ISO AI endorsements since 2004 (and most carrier AI endorsements I’ve seen), the AI has no coverage on a named insured’s CGL policy unless the named insured has SOME liability (i.e., negligence, fault, etc.). In other words, there is no coverage for the AI’s sole negligence.

However, as Craig Stanovich points out in the Linkedin discussion, that’s not what the policy forms actually say. Coverage is contingent upon loss “caused, in whole or in part, by” the named insured and others acting on behalf of the named insured. That may sound like a fine line, but requiring some part of the loss to be “caused by” the named insured is different from requiring negligence of the named insured and this court case illustrates that.

Words matter. Grammar matters. Punctuation matters. This is yet another reason why we cannot generalize about policy coverage. The language must be read and expressed precisely.

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information

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