In order to obtain coverage under an additional insured endorsement, more than an incidental connection with leased premises is required.
An employee of Trilithic was injured on her way to work, when she slipped and fell on a pathway outside of the leased premises. Trilithic leased its space from Duke Realty Corp. An insurer, Michigan Mutual Ins., issued a commercial general liability policy naming Trilithic as the named insured on the policy. An endorsement attached to the policy designated Duke Realty Corp. as an additional insured.
The employee filed suit against the additional insured Duke Realty Corp., who then tendered the defense to the insurer, Michigan Mutual Ins. The insurer, Michigan Mutual Ins., declined to defend or indemnify the additional insured, Duke Realty Corp., but Duke Realty Corp.’s general liability insurer, Liberty Mutual Ins., did provide defense. The insurer, Liberty Mutual Ins., as subrogee of Duke Realty Corp., filed suit against the insurer Michigan Mutual Ins., seeking indemnification for the claims asserted by the employee.
Resolution of the case hinged on the interpretation of the additional insured endorsement attached to the insurance policy issued by the insurer, Michigan Mutual Ins., to Trilithic. The endorsement provided coverage to the additional insured Duke Realty Corp. for liability arising out of the ownership, maintenance, or use of that part of the premises leased to the facility. The insurer, Liberty Mutual Ins., argued that although the fall occurred outside the leased premises, liability still fell on the insurer, Michigan Mutual Ins., because the employee was injured as she was reporting to work at Trilithic.
The Court deemed this isolated connection insufficient to bring the accident within the coverage of the policy under the additional insured endorsement. The accident did not occur on the part of the premises leased to Trilithic, but rather occurred in a common area outside of the leased premises and under Duke Realty Corp.’s control. The Court held that the insurer, Michigan Mutual Ins., had no duty to defend or indemnify the insurer, Liberty Mutual Ins.
Liberty Mutual Ins. Co. v. Michigan Mutual Ins. Co., 891 N.E.2d 99 (2008).
