Signed Bid Proposal Found to Constitute "Written Contract" Triggering Additional Insured Coverage

COMMERCIAL GENERAL LIABILITY – BLANKET ADDITIONAL INSURED ENDORSEMENT – "WRITTEN CONTRACT" REQUIREMENT – SIGNED BID PROPOSAL

Netherlands Ins. Co. v. Endurance Am. Specialty Ins. Co.
(1st Dept., decided 1/9/2018)

Happy New Year everyone.  Let's start 2018 with a short review of what constitutes a "written contract" for purposes of triggering coverage under a blanket additional insured endorsement.

A blanket additional insured endorsement to a commercial general liability policy automatically grants insured status to a person or organization that the named insured is required by "written contract" to add as an insured.  Although there are multiple iterations of such endorsements and policy provisions, in this case Endurance American Specialty Insurance Company's general liability policy promised to afforded coverage to "[a]ny entity required by written contract ... to be named as an insured."

Endurance's insured, a contractor, bid a job to Netherland's insured, Bangor Realty, LLC.  Endurance's contractor ultimately got the job and a during the course of that construction project an injury occurred, leading to a personal action being brought against Endurance's insured and Bangor.  Endurance declined to extend additional insured coverage to Bangor, contending that the written bid proposal did not constitute a "written contract" that required Bangor to be named as an insured.  Netherlands commenced this declaratory judgment action, and Supreme Court granted Endurance's motion for summary judgment, declaring that Endurance was not obligated to defend or indemnify Bangor in the underlying personal injury action.

In REVERSING that order and judgment, the First Department held that the signed bid proposal in this case constituted a "written contract" within the meaning of the Endurance policy's blanket additional insured endorsement:

 The "Bid Proposal Document" for the construction project in which the underlying personal injury action arose is such a written contract. The proposal names the parties and the "Total agreed price," contains the dated signatures of the parties immediately below the agreed price, and incorporates by reference "the approved plan for the entire project," stating that all work is to be completed in strict accordance with the approved plan and with the plans and specifications prepared by the architect. Although the parties may have intended to execute a more formal agreement later, the proposal constitutes a binding agreement (see Bed Bath & Beyond Inc. v IBEX Constr., LLC, 52 AD3d 413 [1st Dept 2008]; Zurich Am. Ins. Co. v Endurance Am. Speciality Ins. Co., 145 AD3d 502 [1st Dept 2016]), and it requires the contractor, defendant's insured, to obtain a policy naming the owner (Bangor) as an additional insured.