When a contractor is sued in a construction defect / damage lawsuit, the lawsuit should implicate the scope of work of certain subcontractors. The contractor wants to tender the defense of that lawsuit to those subcontractors that, hopefully, identified the contractor as an additional insured under their commercial general liability insurance policy. The contractor wants those implicated subcontractors’ commercial general liability insurers to defend (or share in the defense) and indemnify it in connection with the lawsuit.
An insurer’s duty to defend is triggered by the allegations in the lawsuit. If these allegations are not pled to trigger the duty to defend, then that will allow the insurer to refuse a defense to its insured or an additional insured. In other words, if these allegations are not pled to trigger the duty to defend, the insurer has no additional insured obligation.
For example, a general contractor was sued for defective roofing. The lawsuit did not allege that the defective roofing caused property damage (which is a defined term in a commercial general liability insurance policy). Without the allegation that there was damage other than to the roof itself (e.g., property damage), the duty to defend was never triggered. Even though the general contractor sued its roofer’s commercial general liability insurer arguing that the insurer had a duty to defend it in connection with the underlying lawsuit, the court held differently because the lawsuit never asserted property damage. This meant that the roofer’s insurer had no additional insured obligation to defend the general contractor in connection with the lawsuit.
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