RRD Obtains Summary Judgment for Insurance Agency

RRD Associate Shivani Desai recently won summary judgment for the firm’s client, an insurance agency, in connection with an errors and omissions claim brought against it in connection with a serious personal injury lawsuit.  The plaintiff is suing several defendants to recover for injuries sustained when she slipped and fell due to a puddle of water in a parking garage.  According to her suit, the puddle was caused by steam cleaning operations that were taking place at the garage overnight.  She sued both the owner of the parking garage and the steam cleaning company; the steam cleaning company is the customer of RRD’s client, the insurance agency. 

 Prior to the start of the work, the steam cleaning company asked the insurance agency to issue a certificate of insurance to the parking garage owner naming the garage owner as an additional insured on the steam cleaning company’s liability policy.  During discovery, the garage owner determined that the insurance agency issued the certificate of insurance as requested but failed to issue an endorsement to the policy to actually make the garage owner an additional insured.  When the insurer later denied coverage to the garage owner, the garage owner filed a third-party complaint against the insurance agency.  The garage owner claimed that it was an intended or foreseeable third-party beneficiary of the insurance agency’s contract with the steam cleaning company or, alternatively, that it enjoyed third-party beneficiary rights under the steam cleaning company’s insurance policy.

After lengthy briefing and oral argument, the court agreed with Shivani’s argument that the insurance agency did not owe any duty of care to the parking garage owner.  The court specifically found that the garage owner was not a third-party beneficiary of either the insurance policy or the contract between the insurance agent and its customer, the steam cleaning company.  In addition, the court agreed that the issuance of a certificate of insurance that indicates that the certificate holder is an additional insured does not, of itself, confer any rights on certificate holder.