A-1 Roofing Co. v. Navigators Ins. Co.
958 N.E.2d 695
Ill. App. Ct.2011Background
- A-1 Roofing was the general contractor for a Barrington High School roof resurfacing project; Frost was a subcontractor and insured A-1 as an additional insured under Frost's policy with NIC.
- The NIC policy includes an additional insured endorsement with a sole negligence exclusion: no coverage for claims arising out of the sole negligence of the additional insured or its agents/employees.
- McKoin, an employee of Midwest Sheet Metal (a Frost subcontractor), was killed while BSE, Frost’s subcontractor, performed work on Frost’s behalf for A-1.
- McKoin’s estate sued multiple defendants, including A-1 and BSE; Frost was not named in the underlying complaint.
- A-1 filed a declaratory judgment action against NIC and Frost; the trial court granted NIC summary judgment denying defense/indemnity; the appellate court reversed and remanded.
- The court liberally construed the policy; it held the sole negligence clause was not triggered because the underlying complaint alleged negligence by multiple parties, not solely A-1.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the sole negligence exclusion negate coverage here? | A-1: exclusive sole negligence of A-1; exclusion applies. | NIC: underlying complaint targets A-1's sole negligence. | No; exclusion not triggered; complaint did not allege sole negligence by A-1. |
| Does A-1's liability arise from work performed for A-1 on Frost's project by BSE, bringing it within 'your work' on behalf of the insured? | Liability arose from Frost’s work performed for A-1 through BSE. | Policy limits coverage to work performed directly by insured, not via subcontractors. | Yes; work performed for A-1 on Frost's behalf by BSE falls within 'your work' on your behalf. |
| Was NIC obligated to defend/indemnify A-1 under the policy? | A-1 entitled to defense/indemnity; sole negligence clause not triggered. | No duty to defend/indemnify given exclusion. | NIC had a duty to defend and indemnify A-1; summary judgment reversed and remanded. |
| Is NIC estopped from denying coverage due to its failure to defend or seek declaratory relief? | Estoppel applies due to Ehlco rule. | No estoppel because defenses were preserved. | NIC estopped from raising policy defenses. |
Key Cases Cited
- National Fire Insurance of Hartford v. Walsh Construction Co., 392 Ill.App.3d 312 (Ill. App. 2d Dist. 2009) (sole negligence exclusion discussed in context of sole blame on the additional insured)
- L.J. Dodd Construction, Inc. v. Federated Mutual Insurance Co., 365 Ill.App.3d 260 (Ill. App. 2d Dist. 2006) (exclusion where underlying complaint alleged no one besides the insured was negligent)
- Hoffman Estates v. Cincinnati Insurance Co., 283 Ill.App.3d 1014 (Ill. App. 1st Dist. 1996) (sole negligence language interpreted to require exclusive/single-handed liability)
- Ehlco v. Ehlco Liquidating Trust, 186 Ill.2d 127 (Ill. 1999) (estoppel when insurer fails to defend or seek declaratory relief)
- Wilkin Insulation Co. v. United States Fidelity & Guaranty Co., 144 Ill.2d 64 (Ill. 1991) (liberal construction in favor of insured; ambiguities resolved for coverage)
- American Economy Insurance Co. v. Holabird & Root, 382 Ill.App.3d 1017 (Ill. App. 1st Dist. 2008) (relates to causation and 'arose out of' work theory for coverage)