South Carolina Electric and Gas Company v. Old Republic Insurance Company, 2:16-cv-02468

SCE&G contracted with Emerson Process to update turbine controls at the Canadys Plant; the Master Agreement required Emerson to list SCE&G as an additional insured but "only to the extent of the negligent acts or omissions of Emerson."
Old Republic insured Emerson under a CGL policy and issued a Certificate naming SCE&G as an additional insured subject to the same limiting language.
In 2011 an Emerson subcontractor’s employee, Samuel Washington, was electrocuted; Washington and his wife sued Emerson, SCE&G, and others in state court alleging negligence and related claims; the complaints assert identical allegations against Emerson and SCE&G and do not expressly plead vicarious liability.
Emerson settled with the Washingtons; SCE&G incurred over $90,000 in defense costs and sought indemnity/defense from Old Republic.
SCE&G moved for partial summary judgment seeking a declaration that Old Republic breached its duty to defend and must reimburse past defense costs and fund ongoing defense; the court denied the motion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Policy language "to the extent of the negligent acts or omissions of Emerson" limits additional-insured coverage to vicarious liability for Emerson's negligence	SCE&G: language does not restrict coverage to vicarious liability; it can cover direct claims tied to Emerson's conduct	Old Republic: language limits coverage to claims based on Emerson's negligence (vicarious/derivative liability)	Court: language unambiguously limits additional-insured coverage to vicarious liability for Emerson's negligent acts or omissions
Whether the underlying complaints create a possibility SCE&G could be held vicariously liable for Emerson (thus triggering duty to defend)	SCE&G: identical allegations against both defendants create at least a possibility of vicarious liability and allow for apportionment/empty-chair defenses	Old Republic: complaints assert direct negligence against SCE&G, not vicarious liability; therefore no potential coverage under the vicarious-liability-limited endorsement	Court: underlying complaints do not allege vicarious liability or otherwise create the requisite possibility; summary judgment for SCE&G denied

Sloan Constr. Co. v. Central Nat'l Ins. Co. of Omaha, 236 S.E.2d 818 (S.C. 1977) (distinguishes duty to defend from duty to indemnify; duty to defend is broader)
Marathon Ashland Pipeline, LLC v. Maryland Cas. Co., 243 F.3d 1232 (10th Cir. 2001) (policy language "arising out of" can create broader additional-insured coverage than language limited to negligence of named insured)
SFH, Inc. v. Millard Refrigerated Servs., Inc., 339 F.3d 738 (8th Cir. 2003) (coverage "arising out of" named insured's work is broader than coverage limited to named insured's negligence)
Philadelphia Elec. Co. v. Nationwide Mut. Ins. Co., 721 F. Supp. 740 (E.D. Pa. 1989) (contrast of broader versus narrower additional-insured endorsements; parties can limit coverage to negligence of named insured)
Harbor Ins. Co. v. Lewis, 562 F. Supp. 800 (E.D. Pa. 1983) (upheld narrow endorsement limiting additional-insured coverage to liability resulting from named insured's negligence)
Marks v. Scottsdale Ins. Co., 791 F.3d 448 (4th Cir. 2015) (additional-insured defense not owed where endorsement limits coverage to claims based on named insured's negligence and complaint does not plead vicarious liability)
USAA Prop. & Cas. Ins. Co. v. Clegg, 661 S.E.2d 791 (S.C. 2008) (insurer must defend if underlying complaint creates a possibility of coverage unless exclusion unambiguously applies)