Recently, the Appellate Division, First Department decided two significant cases, Burlington Insurance Co. v. NYC Transit Authorty and Structure Tone, Inc. v. National Casualty Co., issuing guidance on when additional insured endorsements apply to third parties under a commercial general liability policy (14 N.Y.S.3d 377 (1st Dept 2015) and 13 N.Y.S.3d 52 (1st Dept 2015)).

The court in Burlington Insurance took on the question of whether an additional insured endorsement in a general liability policy covered an injury that was caused by an act of the named insured, even though the named insured was not at fault. The court looked to the express language of the endorsement itself, which did not include any explicit reference to negligence or fault of the named insured. Accordingly, the court held that the endorsement only requires the named insured to be the cause of the accident, regardless of fault.

In Structure Tone, the court also examined an issue arising from a similar additional insured endorsement. In this case, the owner of a construction project sought additional insured coverage under a subcontractor's general liability policy for an injury that occurred at the site. The court pointed out that the owner did not contract directly with the subcontractor, who was the named insured on the policy. Since the owner did not contract with the named insured on the policy, the court held that it was not entitled to additional insured coverage.

Given how frequently additional insured coverage claims are litigated in New York, these two decisions may have broad implications. Burlington Insurance expanded additional insured protection to all acts or omissions of the named insured, whether or not there was any fault on the part of the named insured. Structure Tone, however, restricted additional insured coverage to only those in direct contract with the named insured. Owners of construction projects, in particular, should take note of this and ensure that they are properly protected in the event of any incident on the property.