Issues of Fact Preclude Summary Judgment on Whether Insurer is Estopped from Denying Additional Insured Coverage

CGL – ADDITIONAL INSURED – CERTIFICATE OF INSURANCE – ESTOPPEL
Sevenson Envtl. Servs., Inc. v. Sirius Am. Ins. Co.
(4th Dept., decided 6/11/2010)

Plaintiffs submitted a certificate of insurance (COI) providing that they "and their respective officers, employees and agents [we]re named as additional insureds on [Thomas Johnson Inc.'s general liability policy with Sirius on] a direct, primary and non-contributory basis."  They also submitted an additional insured (AI) endorsement naming persons or organizations "as on file with company."  In response, Sirius submitted an affidavit of its third-party claims administrator, who averred that the named insured's underwriting file did not contain any request or notice to name plaintiffs as additional insureds on the policy.

In ruling that Supreme Court properly denied summary judgment to Sirius, the Fourth Department found that the fact that Sirius's third-party claims administrator did not locate any documentation in the named insured's underwriting file was, by itself, insufficient to establish as a matter of law that neither Sirius nor one of its agents possessed documentation naming plaintiffs as additional insureds.

The Fourth Department, however, disagreed with the lower court's ruling that Sirius was estopped from denying AI coverage to the plaintiffs:

It is well established that a certificate of insurance, by itself, does not confer insurance coverage, particularly under the circumstances of this case, in which the certificate expressly provides that it "is issued as a matter of information only and confers no rights upon the certificate holder [and] does not amend, extend or alter the coverage afforded by the policies listed below," e.g., the general liability policy. "A certificate of insurance is only evidence of a carrier's intent to provide coverage but is not a contract to insure the designated party nor is it conclusive proof, standing alone, that such a contract exists" (Tribeca Broadway Assoc., LLC, 5 AD3d at 200; see School Constr. Consultants, Inc. v ARA Plumbing & Heating Corp., 63 AD3d 1029, 1030-1031; Home Depot U.S.A., Inc. v National Fire & Mar. Ins. Co., 55 AD3d 671, 673).

Nevertheless, an insurance company that issues a certificate of insurance naming a particular party as an additional insured may be estopped from denying coverage to that party where the party reasonably relies on the certificate of insurance to its detriment (see Lenox Realty v Excelsior Ins. Co., 255 AD2d 644, 645-646, lv denied 93 NY2d 807; Bucon, Inc. v Pennsylvania Mfg. Assn. Ins. Co., 151 AD2d 207, 210-211). For estoppel based upon the issuance of a certificate of insurance to apply, however, the certificate must have been issued by the insurer itself or by an agent of the insurer (see Tribeca Broadway Assoc., LLC, 5 AD3d at 200; Niagara Mohawk Power Corp. v Skibeck Pipeline Co., 270 AD2d 867, 869; Lenox Realty, 255 AD2d at 646; see also American Ref-Fuel Co. of Hempstead v Resource Recycling, 248 AD2d 420, 423-424).

The Fourth Department held that both parties failed to eliminate all triable issues of material fact regarding whether the COI was issued by or at the direction of an agent of Sirius.