Insurers Dispute Who Must Defend Additional Insured
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Post 4806
Other Insurance Clauses Control who Defends Whom
The Travelers and Defendant Ohio Security Insurance Company (“Ohio Security”) moved for summary judgment. In The Travelers v. Ohio Security No. 23-cv-3451 (AS), United States District Court, S.D. New York (May 10, 2024) the USDC resolved the disputes.
BACKGROUND
Ohio Security issued an insurance policy to Sutega USA Corp. (“Sutega”). Travelers sued seeking a declaratory judgment that, under the policy, Ohio Security has a duty to defend and indemnify Shawmut Design and Construction (“Shawmut”), Zara USA, Inc. (“Zara”), Eklecco Newco LLC (“Eklecco”), and Pyramid Management Group, LLC (“Pyramid”) in a state court lawsuit.
Construction Contracts
In 2015, Zara, Shawmut, and Sutega entered into several contracts related to the construction of a new Zara store in Palisades, New York. The contract states that Shawmut “shall supervise and direct the Work” and all parties included additional insured provisions and other insurance provisions.
Insurance Policies
The Travelers policy provided commercial general liability coverage subject to certain terms, conditions, and exclusions. The Travelers policy contains an amendment to the “other insurance” provision stating: “This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis, that is available to the insured when the insured is added as an additional insured under any other policy, including umbrella or excess policy.”
The Travelers Policy provides coverage to Zara, Eklecco, and Pyramid as additional insureds subject to certain terms and conditions. Ohio Security issued a commercial general liability policy to Sutega. The Ohio Security policy applied Sutega’s place of business is listed as an address in Miami, Florida. As relevant here, the policy states that Ohio Security has “the right and duty to defend the insured against any ‘suit’ seeking” damages for bodily injury.
The policy contains a Commercial General Liability Extension Endorsement that defines “insured” to include: “any person or organization whom you have agreed to add as an additional insured in a written contract.
The Ohio Security policy also contains an “other insurance” provision.
Underlying State Court Lawsuit
John Autenrieth was injured while using a table saw during the construction. Autenrieth sued Eklecco, Shawmut, Apollo, Pyramid, Zara, and Palisades Center, LLC in New York state court. Autenrieth alleges that the defendants breached their non-delegable duties under New York law to maintain a safe work environment.
Shawmut’s insurer, Travelers, alleged that Sutega’s insurer, Ohio Security, has a duty to defend and to indemnify Shawmut, Zara, Eklecco, and Pyramid in the state court action. Ohio Security denied that its policy covers these entities. The only disputed issue for the Court is whether Shawmut is covered by the Ohio Security policy. The answer is yes, at least as to Ohio Security’s duty to defend Shawmut.
DISCUSSION
For purposes of these motions, the Court found that no actual conflict exists. The only disputed issue is whether the Ohio Security policy covers Shawmut. Under both Florida and New York law, an insurer’s duty to defend is broad. The parties do not dispute that there is a written contract between Sutega and Shawmut. Therefore, Ohio Security has a duty to defend Shawmut in the underlying state court action pursuant to the policy issued to Sutega.
Primary Coverage
Shawmut is an additional insured under the Ohio Security policy in the underlying state court litigation. Neither party disputes that Shawmut also has insurance coverage as the named insured under the Travelers policy. The Travelers argued that Ohio Security is required to provide Shawmut coverage on a primary and non-contributory basis. Given the plain language of the insurance contracts and Ohio Security’s failure to respond, the Court agrees with Travelers.
ZALMA OPINION
The “other insurance” clauses in insurance policies often results in unnecessary disputes between insurers as to who, between multiple insurers who insure against the same risk of loss, must be first in line to defend or indemnify an insured. The court resolved one of those disputes in this case and told the various insurers and insureds to resolve any remaining issued. To answer the question as to Shawmut, Ohio is on first.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
DOJ Creates National Fraud Enforcement Division
Will the Feds Take on Insurance Fraud? Possibly as Part of a National Anti-Fraud Effort
On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...
When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment
Post number 5345
Read the full article at https://www.linkedin.com/pulse/efficient-proximate-cause-doctrine-saves-claim-barry-zalma-esq-cfe-yndlc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.
FACTS
American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...
Breach of a Specific Condition Precedent Is a Complete Defense
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In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.
Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).
After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
What Must be Done after Notice of a Claim is Received by the Insurer
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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...
