Excess to Infinity

EMPLOYERS LIABILITY – COMMERCIAL UMBRELLA – UNLIMITED COVERAGE – EXHAUSTION OF PRIMARY POLICY LIMIT – SCHEDULE OF UNDERLYING INSURANCE  
Tully Construction Co., Inc. v. Illinois National Ins. Co.
(2nd Dept., decided 8/19/2015)

At what point is excess to unlimited coverage triggered?  

Tully Construction Company obtained a New York workers compensation/employers liability (WCEL) from Zurich American Insurance Company and a commercial umbrella liability insurance policy from Illinois National Insurance Company.  The umbrella policy required Tully to exhaust all insurance available before the excess coverage provided by the umbrella policy would be triggered. The umbrella policy also explicitly stated that, despite the listing of any limits of underlying insurance in the Schedule of Underlying Insurance, if the actual insurance available to Tully exceeded the amounts listed in the schedule, the umbrella policy would not be triggered until those greater amounts were met and exceeded. In underlying personal injury actions, the parties settled for $9,000,000, with Zurich paying $6,500,000 and Illinois paying $2,500,000.  This declaratory judgment action ensued, with Illinois seeking reimbursement from Zurich of Illinois' $2,500,000 settlement payment.

In AFFIRMING the Supreme Court's order granting summary judgment to Illinois and ordering Zurich to reimburse Illinois, the Appellate Division, Second Department, held:

The WCEL policy contained a New York Limit of Liability Endorsement which provided that in cases of bodily injury to an employee arising out of and in the course of employment that is subject to and is compensable under the Workers' Compensation Law, Zurich could not limit its liability and, as such, the policy was unlimited in those cases (see generally Oneida Ltd. v Utica Mut. Ins. Co., 263 AD2d 825 [New York recognizes no liability limits in Workers' Compensation and Employer's Liability policies]). 

In light of the unlimited nature of the WCEL policy, the Supreme Court properly concluded that the limits of the underlying insurance policies were never met and, as such, the excess coverage provided by the umbrella policy was never triggered (see Merchants Mut. Ins. Co. v New York State Ins. Fund, 85 AD3d 1686). 

Contrary to the plaintiffs' contention, under the circumstances of this case, the Supreme Court properly concluded that apportionment of liability pursuant to Hawthorne v South Bronx Community Corp. (78 NY2d 433) was not applicable, since this case involves a coverage dispute between a primary insurer and an excess insurer (see Liberty Mut. Ins. Co. v Insurance Co. of State of Pa., 43 AD3d 666; see also National Union Fire Ins. Co. of Pittsburgh, Pa. v State Ins. Fund, 222 AD2d 369; B.K. Gen. Contrs. v Michigan Mut. Ins. Co., 204 AD2d 584; Aetna Cas. & Sur. Co. v Lumbermens Mut. Cas. Co., 136 AD2d 246).

Sorry Buzz.  No excess umbrella liability coverage for you.  

State Insurance Fund Is Not Subject to Direct Suit Pursuant to Insurance Law §§ 3420(A)(2) & (B)(1)

CGL – EMPLOYERS' LIABILITY – INSURANCE LAW § 3420(A)(2) ACTION
National Union Fire Insurance Co. of Pittsburgh, PA. v. State of New York
(1st Dept., decided 4/29/2010)

In Lang v Hanover Ins. Co., 3 NY3d 350 (Ct. Apps. 2004), the New York Court of Appeals held that without contractual privity, an injured party may not bring a direct suit against an alleged tortfeasor's liability insurer before the injured party obtains a money judgment against the tortfeasor.  The Court noted that

Insurance Law § 3420(b)(1) ... grants an injured party a right to sue the tortfeasor's insurer, but only under limited circumstances—the injured party must first obtain a judgment against the tortfeasor, serve the insurance company with a copy of the judgment [pursuant to Insurance Law § 3420(a)(2)] and await payment for 30 days. Compliance with these requirements is a condition precedent to a direct action against the insurance company.

National Union brought this action in the New York Court of Claims as subrogee of its insureds, Chase Manhattan Bank and Morse Diesel International, against the State Insurance Fund, which insured Red Ball Interior Demolition Corporation.  Although National Union argued that this action was not brought under Insurance Law §§ 3420(a)(2) and (b)(1), National Union's initiatory pleadings relied on Insurance Law § 3420(a)(2).  Both parties moved for summary judgment, and the Court of Claims granted the State Insurance Fund's motion. 

In AFFIRMING the lower court's order granting summary judgment to the State Insurance Fund, the Appellate Division, First Department, held:

1. the State Insurance Fund is exempt from actions brought pursuant to Insurance Law §§ 3420(a)(2) and (b)(1) due to Insurance Law § 1108(c); and
   
   
2. even if the State Insurance Fund could be sued directly pursuant to those statutes, National Union's subrogors had not obtained a money judgment against the State Insurance Fund's insured, the alleged wrongdoer.  The Court of Appeals' ruling in Lang v. Hanover applies to actions commenced both before and after that 2004 decision. 

Contrary to claimant's contention, this is an action under Insurance Law § 3420. In both its motion for leave to file a late notice of claim and its amended claim, claimant relied on Insurance Law § 3420(a)(2). Furthermore, "the subrogee possesses only such rights as the subrogor possessed, with no enlargement or diminution" (Allstate Ins. Co. v Stein, 1 NY3d 416, 421 [2004] [internal quotation marks and citation omitted]). Under the common law, the subrogors (Chase Manhattan Bank and Morse Diesel International) would have been able to sue Red Ball Interior Demolition Corp. (the alleged wrongdoer), but they would not have been able to sue the State Insurance Fund (Red Ball's insurer), with whom they had no contractual relationship (see Lang v Hanover Ins. Co., 3 NY3d 350, 353 [2004]). Like claimant, Chase and Morse Diesel would have had to use Insurance Law § 3420 to sue the State Insurance Fund. However, "the State Insurance Fund is exempt from the requirements of Insurance Law § 3420(a) and (b)" due to Insurance Law § 1108(c) (see Kenmore-Tonawanda School Dist. v State of New York, 38 AD3d 203, 203 [2007], lv denied 10 NY3d 702 [2008]), and we decline to depart from this precedent, which the Court of Appeals chose not to review.

Even if, arguendo, Insurance Law § 3420 applied to the State Insurance Fund, Chase and Morse Diesel did not obtain a judgment against Red Ball, which is a condition precedent to a direct suit against Red Ball's insurer (see Lang, 3 NY3d at 352, 354). Contrary to claimant's contention, Lang is applicable even though the claim was filed before Lang was decided (see Weierheiser v Hermitage Ins. Co., 17 AD3d 1133, 1134 [2005]; see also Geissler v Liberty Mut. Ins. Co., 23 AD3d 432, 433 [2005]). Furthermore, we decline to consider claimant's argument, made for the first time in its reply brief on appeal, that we should hold this appeal in abeyance while it attempts to obtain a money judgment. Although orders are sometimes treated as judgments (see Matter of New York State Crime Victims Bd. v Gordon, 66 AD3d 1213, 1214 [2009]), the kind of order that Gordon permitted to be treated as a judgment was one directing the payment of money (id. at 1214-1215). By contrast, the order obtained by Chase and Morse Diesel set the matter down for an inquest, which never occurred.

Fourth Department Rejects Attorneys' Fees Claim for Defending Insurer's Appeal -- Not So Mighty Midgets

EMPLOYER'S LIABILITY – RIGHT TO INDEPENDENT COUNSEL – ATTORNEYS' FEES
Thomas Johnson, Inc. v. State Ins. Fund
(4th Dept., decided 11/13/2009)

Since at least 1979, the New York rule regarding the recoverability of attorneys' fees in declaratory judgment actions has been that it is only when the insured is "cast in a defensive posture by the legal steps an insurer takes in an effort to free itself from its policy obligations" and wins the DJ action that the insured may recover its attorneys' fees.  The seminal case pronouncing that rule is the New York Court of Appeals' decision in Mighty Midgets v Centennial Ins. Co., 47 NY2d 12 (1979), and the rule has come to be known simply as the "Mighty Midgets rule".  Generally speaking, the recoverability of attorneys' fees depends on which of the two parties -- insured or insurer -- commences the DJ action:  if the insured commenced it, no attorneys' fees regardless of the outcome; if the insurer commenced it and loses, attorneys' fees can be awarded. 

Some inventive counsel, including the plaintiff's law firm in this DJ action, have argued that even in cases such as this where the insured was the one to initiate the DJ action, the insured should be able to recover its attorneys' fees for defending against the insurer's counterclaim (which is unnecessary in a DJ action since the court is obligated to declare the rights and responsibilities of all parties to the DJ action), motion for summary judgment, or appeal of an adverse order or judgment. In this case, the defendant State Insurance Fund unsuccessfully appealed from the lower court's judgment declaring that the insured was entitled to an attorney of its own choosing, at SIF's expense, in an underlying personal injury action.

Counsel for the plaintiff then sought to recover their fees for defending against the insurer's unsuccessful appeal and managed to convince Niagara Supreme that such fees were recoverable under the Midget Midgets rule because the insurer's appeal had cast plaintiff in a "defensive posture" vis-à-vis that appeal.  The SIF appealed the award of such attorneys' fees to the plaintiff insured, and the Fourth Department REVERSED, holding:

We agree with defendant that Supreme Court erred in granting judgment in plaintiff's favor declaring that defendant is obligated to pay all costs and fees incurred by plaintiff in the defense of an appeal taken by defendant from a prior judgment (Thomas Johnson, Inc. v State Ins. Fund, 50 AD3d 1544). The prior judgment, inter alia, granted that part of plaintiff's cross motion seeking summary judgment declaring that plaintiff is entitled to an attorney of its own choosing, at defendant's expense, in the underlying personal injury action. "[I]t is well settled that an insured may not be awarded attorney fees incurred in the prosecution of a declaratory [judgment] action against the insurer to determine coverage" (Penn Aluminum v Aetna Cas. & Sur. Co., 61 AD2d 1119, 1120), unless the insured was "cast in a defensive posture by the legal steps an insurer takes in an effort to free itself from its policy obligations" (Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21), and that is not the case here. Moreover, the fact that defendant took an appeal in a declaratory judgment action commenced by plaintiff is of no moment (see generally Crouse W. Holding Corp. v Sphere Drake Ins. Co., 248 AD2d 932, affd 92 NY2d 1017). We therefore modify the judgment accordingly.

No moment.  Same holding ostensibly should apply to fees for defending against insurer's counterclaims or defensive motions or cross motions for summary judgment in DJ actions in which the insured occupies the plaintiff's position. I have an insured-initiated DJ action heading to a jury trial in January in which the same law firm has made the same argument.  Must add this decision to my motion in limine.  Grazie.

Coinsurance Recovery Action Against New York State Insurance Fund Must Be Brought in New York Court of Claims

CGL – COINSURANCE CONTRIBUTION – SUIT AGAINST STATE INSURANCE FUND
Twin City Fire Ins. Co. v. State Ins. Fund
(1st Dept., decided 9/24/2009)

The New York State Court of Claims is the exclusive forum for civil litigation seeking damages against the State of New York or certain other State-related entities such as the New York State Thruway Authority, the City University of New York and the New York State Power Authority (claims for the appropriation of real property only).  Plaintiff's denomination of this action as being one for declaratory relief notwithstanding, the Court of Claims is also the forum in which a commercial general liability insurer must sue the New York State Insurance Fund for recovery of coinsurance contribution of defense and indemnification costs for a mutual insured, holds the First Department in this case.

CGL and Garage Insurers Found to Owe Policy Limit Coinsurance to Employers' Liability Insurer

CGL – GARAGE POLICY – EMPLOYER'S LIABILITY POLICY – COINSURANCE CONTRIBUTION – UNTIMELY DISCLAIMER
State Ins. Fund v. American Hardware Mut. Ins. Co.
(2nd Dept., decided 7/7/2009)

Question:  In New York, when does a CGL or a garage policy apply to cover a garage employee's injuries sustained during employment?  Answer:  When  the insurers wait more than four months to disclaim coverage based on those policies' employee injury exclusions, that's when. 

The parties in this coinsurance contribution action insured World of Hitches N Rentals in North Bellmore, New York -- the State Fund (SIF) under a WC/EL policy; and American Hardware under a $300K CGL policy and a $300K garage policy.  An employee of the insured was burned when a container he was filling with kerosene exploded.  He sued various defendants, three of which impleaded the insured, World of Hitches, in a third-party action.  Although both insurers initially assumed World of Hitches' defense, SIF took over that defense after American Hardware disclaimed coverage under both policies more than four months after receiving notice of the third-party action, based on the policies' employee injury exclusion.

Then underlying action eventually settled for $1,475,000, with SIF contributing $750,000 and agreeing to waive its $225,000 WC lien in the amount of $225,000. SIF then brought this action for a proportionate coinsurance contribution towards its defense and indemnification costs relative to the underlying action and successfully moved for summary judgment, the trial court awarding SIF $650,000 in principal, representing approximately two-thirds of its combined indemnity contribution of $975,000, and two-thirds of its defense costs in the underlying personal injury action.

On appeal, the Second Department agreed with the trial court's determinations that "[s]ince the disclaimer was based on policy exclusions, the defendants were required to provide World of Hitches with timely notice of its disclaimer under Insurance Law § 3420(d)", and American Hardware's disclaimer,  issued more than four months after receiving notification of the third-party action, was untimely as a matter of law.  The Second Department rejected the defendants' contention that SIF was obligated to demonstrate prejudice from their delay in disclaiming.

The Second Department also rejected the defendants' argument that that even if the disclaimer was untimely, no coverage was provided under the garage policy because the employee was not injured while engaged in garage operations:

The record establishes that the employee's actions were taken in furtherance of the garage business (compare Lancer Ins. Co. v Whitfield,AD3d, 2009 NY Slip Op 02975 [2d Dept 2009]; Singh v Allcity Ins. Co., 1 AD3d 501; Minerva v Merchants Mut. Ins. Co., 117 AD2d 720).

The Second Department did, however, MODIFY the trial court's ruling to reduce the indemnification coinsurance award from $650,000 down to $300,000, holding:

Although the defendants were obligated to defend and indemnify World of Hitches in the underlying action (see Moore v Ewing, 9 AD3d 484), and thus must pay their proportionate share of the settlement (see Hawthorne v. South Bronx Community Corp., 78 NY2d 433) and defense costs incurred in the underlying action, their contribution may not exceed the limits of the policies. Here, both policy limits were $300,000 per accident. Moreover, the garage policy provided that all of the defendants' policies were mutually exclusive in that if more than one policy applied to the same accident, the maximum limit of liability under all the policies would not exceed the highest applicable limit under one policy. Thus, the maximum amount the defendants were required to contribute to the settlement was $300,000, and the judgment must be modified accordingly. 

This aspect of the Second Department's decision is noteworthy in standing for two propositions:  that an untimely disclaimer under Insurance Law § 3420(d) does not: (1) increase the disclaiming insurer's coinsurance obligation above policy limits; or (2) preclude the disclaiming insurer from later relying on policy conditions that limit such coinsurance contributions.

Prejudice Not Required for Late Notice of Suit to Employers' Liability Insurer

EMPLOYERS' LIABILITY – LATE NOTICE OF SUIT – PREJUDICE NOT REQUIRED
Liberty Moving & Stor. Co., Inc. v. Westport Ins. Corp.
(3rd Dept., decided 10/16/2008)

New York's no-prejudice rule is on DNR. Come January 17th of next year, liability insurers wishing to disclaim coverage under policies issued, modified or renewed on and after that date will need to demonstrate prejudice from the delay in notification, if less than two years.

If an insured promptly notifies its workers' compensation/employers' liability (WC/EL) insurer of a workers' compensation loss/claim by filing a C-2, must the WC/EL insurer demonstrate prejudice if the insured fails to provide timely notice of a related lawsuit? No, says the Third Department, declining to extend the prejudice requirement for UM/SUM late suit notice cases to employers' liability policies.

On April 5, 2001, Liberty's employee, Christopher Tambini, was injured in the course of his employment while moving a voting booth into a New York City polling place. Four days later, Liberty filed a C-2 with its WC/EL carrier, State Insurance Fund (SIF), which paid compensation benefits for the employee's back injury.

In 2002, Tambini and his wife commenced a personal injury action against the City of New York. In June 2005, the City commenced a third-party action for common law and contractual indemnification and contribution against Liberty, which promptly notified its GL insurer, Westport, but did not notify the SIF. The SIF did not learn about the third-party action until approximately 11 months after Liberty was served, and disclaimed coverage to Liberty based on its late notice of suit (and that Tambini had not sustained a grave injury). Liberty then commenced this DJ action for defense and indemnification coverage from the SIF.

In AFFIRMING Albany Supreme's granting of summary judgment to the SIF, the Third Department held:

The failure to comply with a notice requirement of a liability insurance contract vitiates the contract and, under such circumstances, the carrier is not required to demonstrate actual prejudice from the delay in order to successfully disclaim coverage (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743 [2005]; Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339 [2005]; American Home Assur. Co. v International Ins. Co., 90 NY2d 433, 441-443 [1997]). Here, the subject workers' compensation policy requires plaintiff, in relevant part, to report any injury "at once" and to "[p]romptly give [the Fund] all notices, demands and legal papers related to the injury, claim, proceeding or suit." Sworn evidence submitted by the Fund, which plaintiff failed to adequately refute, established that plaintiff did not provide notice of the third-party action until June 2, 2006, nearly 11 months after having been served. No explanation or excuse for this delay has been asserted. Supreme Court ruled that this delay was unreasonable as a matter of law and plaintiff does not take issue with this specific finding on appeal. Rather, plaintiff argues that, because the Fund has neither pleaded nor proved prejudice for any delay in forwarding the pleadings in the third-party action (and the Tambini action), the Fund is obligated to defend it in the Tambini action.

While the Fund received notice of Tambini's accident four days after it occurred by way of the C-2 claim form seeking workers' compensation benefits, this notice did not satisfy plaintiff's separate obligation to provide prompt notice of the third-party lawsuit that had been commenced against it (see T & S Masonry v State Ins. Fund, 290 AD2d 308, 310 [2002]; Thomson v Power Auth. of State of N.Y., 217 AD2d 495, 496 [1995]; 57th St. Mgt. Corp. v Zurich Ins. Co., 208 AD2d 801, 802 [1994]; see generally Sorbara Constr. Corp. v AIU Ins. Co., 41 AD3d 245, 246 [2007]). Moreover, we find that the Fund was not required to demonstrate prejudice in order to successfully disclaim coverage (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., supra; Argo Corp. v Greater N.Y. Mut. Ins. Co., supra; see also Thomson v Power Auth. of State of N.Y., 217 AD2d at 495; 57th St. Mgt. Corp. v Zurich Ins. Co., 208 AD2d at 801). We are unpersuaded that recent departures from the general "no prejudice" rule in the context of supplemental uninsured and underinsured motorists coverage under automobile insurance policies (see e.g. Rekemeyer v State Farm Mut. Auto Ins. Co., 4 NY3d 468 [2005]; Matter of Brandon [Nationwide Mut. Ins. Co.], 97 NY2d 491 [2002]; Matter of Nationwide Mut. Ins. Co. [Mackey], 25 AD3d 905 [2006]) should be extended to the facts of this case.

In footnote #3, the Third Department also found it unnecessary to "tarry" over the disputed issue of whether New York Insurance Law § 1108(c) exempts the SIF from the timely disclaimer requirements of Insurance Law § 3420(d), since the SIF had issued its disclaimer only five days after first learning of the third-party action.

Employers' Liability (1B) Coverage Not Unlimited for Out-of-State Policy

WC/EL POLICY – EMPLOYER'S LIABILITY UMLIMITED COVERAGE – OUT-OF-STATE POLICY – INSURANCE LAW § 3420(D) – "ISSUED FOR DELIVERY"

Preserver Ins. Co. v. Ryba
(Ct. Apps., decided 6/10/2008)

Ineresting and noteworthy case.

Employers' liability coverage -- sometimes called "1B" coverage -- must be unlimited in EL coverage for policies issued or "issued for delivery" in New York State.

Effective September 9, 2007, an amendment to the New York Workers' Compensation Law § 50 (2), requires out-of-state employers with operations and/or employees in New York State to maintain workers' compensation insurance "through a policy issued under the law of this state." The New York Workers' Compensation Board has advised that this requirement can only be fulfilled when New York is listed in Item 3.A. ("Part One of the policy applies to the Workers' Compensation Laws of the states listed here:") of the policy's Information Page.

This case involved a New Jersey WC/EL policy issued before that amendment. Preserver issued a WC/EL (workers' compensation/employers liability) policy from New Jersey to a New Jersey subcontractor. An employee of that subcontractor (Ryba) was injured in a construction accident on May 17, 2003. Although that subcontractor was allegedly supposed to have the GC (Almeida) listed in its policy as an additional insured, it failed to do so.

Claiming that AAlmeida's negligence caused his paraplegia, Ryba sued Almeida, asserting common-law negligence and New York Labor Law §§ 200, 240(1) and 241(6) causes of action. Because Ryba claimed a grave injury, Almeida commenced a third-party action against Ryba's employer, East Coast Stucco, asserting causes of action for common-law indemnification/contribution, contractual indemnification and breach of contract for failure to procure the promised liability insurance.

Preserver brought this DJ action and sought summary judgment on three grounds: (1) that it had no duty to defend Almeida's cause of action for contractual indemnification or for breach of contract for failure to procure insurance for Almeida because its policy expressly excluded coverage for any liability assumed under a contract; (2) that it had no duty to defend or indemnify East Coast Stucco against Almeida's cause of action for common-law indemnification because Ryba's accident in New York, was not necessary or incidental to East Coast Stucco's work in New Jersey; and (3) that if it must provide employers' liability insurance, coverage is limited to $100,000 as provided by the policy.

Almeida's homewners' insurer, Northern Assurance Company of America, opposed Preserver's motion and cross-moved for summary judgment, contending that Preserver was time-barred under Insurance Law § 3420 (d) from disclaiming coverage, and that the Preserver policy was limitless as to the amount of EL coverage. The Supreme Court granted Northern's cross motion on both grounds and the Appellate Division affirmed.

In REVERSING the decisions of both lower courts, the Court of Appeals held:

New York Insurance Law § 3420 (d) provides that when a liability policy is "delivered or issued for delivery in this state, [if] an insurer shall disclaim liability or deny coverage for death or bodily injury . . . it shall give written notice as soon as is reasonably possible." It is undisputed that the policy was actually delivered in New Jersey by a New Jersey insurer to a New Jersey insured. Was the policy nonetheless "issued for delivery" in New York? We answer in the negative.

A policy is "issued for delivery" in New York if it covers both insureds and risks located in this state (citations omitted). By including New York as an "Item 3.C." state, the policy covers risks located in New York. East Coast Stucco is, however, a New Jersey company, with its only offices located in that state, so it cannot be said that the insured is located in New York. Because the policy was neither actually "delivered" nor "issued for delivery" in New York, Preserver is not required by Insurance Law § 3420 (d) to make timely disclaimer of coverage.

Further, since the policy explicitly excludes coverage for any liability assumed under a contract, Preserver must neither defend nor indemnify East Coast Stucco for the Contractual indemnification or breach of contract causes of action. And even if the policy were "issued for delivery" in New York, Preserver still would not be barred from denying coverage for Almeida's breach of contract claim since Insurance Law § 3420 (d) requires timely disclaimer only for denials of coverage "for death or bodily injury."

On the issue of whether Preserver was required to provide unlimited EL coverage, the Court held:

Nothing in the policy suggests that this cap evaporates when an accident occurs in a 3.C. state. Nor, significantly, does Part Two provide — as Part One does — that employers' liability insurance will conform to the workers' compensation laws of the state where the injury occurs. This conclusion is fortified by Part Two's "Exclusions," stating that this portion of the policy does not cover "any obligation imposed by a workers compensation . . . or any similar law." Plainly, nothing in the insurance contract supports Northern's argument for unlimited liability.

Both insurers agree that no statutory provision mandates unlimited employers' liability coverage. Northern, however, asks us to defer to the New York Manual, arguing that it requires insurance policies to provide unlimited employers' liability coverage, a requirement made applicable in this case because the risk took place in New York.

* * * * *

Plainly, when a state is listed under Item 3.A., the insurer is required to provide a number of additional endorsements that are not required when the state is merely listed in Item 3.C. In East Coast Stucco's policy, which was underwritten in New Jersey, and which lists only New Jersey under Item 3.A., there are several New Jersey endorsements attached to the policy. None, however, provide unlimited employers' liability insurance. Whether New Jersey is listed as a 3.A. or 3.C. state, nothing in the New Jersey Manual requires that an insurer provide unlimited coverage.

The Preserver policy lacks any New York endorsements, precisely because New York is an Item 3.C. state. Here, even if Preserver is bound by the New York Manual, its employers' liability insurance for Ryba's injury should be capped at $100,000 because Preserver was not informed that East Coast was operating in New York. That being so, Preserver was not required to move New York from a 3.C. state to a 3.A. state, and not required to add an endorsement providing unlimited employers' liability insurance for injuries in New York.

Judgment for Preserver granted declaring that it had no duty to indemnify defendant East Coast Stucco with respect to Almeida's contractual indemnification and breach of contract claims in the underlying action, and that Preserver's duty to indemnify defendant East Coast Stucco with respect to the remaining claims against it was limited to $100,000.