Monday, April 30, 2012

Court of Appeals Hears Argument on Additional Insured Claims Regarding the E51st Street Crane Collapse

On April 25, 2012, the Court of Appeals heard Oral Argument in Admiral Insurance Company v. Joy Contractors, Inc., regarding a claim for additional insured coverage by New York Crane & Equipment Company pursuant to its lease agreement with Joy Contractors.  Joy Contractors operated the crane during the construction of a high-rise condominium at 303 East 51st Street in Manhattan.  The crane collapsed, killing seven people including six employees of Joy Contractors.  Joy was insured by Lincoln General Insurance Company for primary general liability and Admiral Insurance Company as excess to the Lincoln General policy.  The Lincoln General policy contained a standard, ISO form additional insured endorsement that covered additional insureds as required by contract with Joy, provided that Joy was performing work "for" or "on behalf of" the proposed additional insured, such as New York Crane.  The Appellate Division held that Joy was not performing any work for New York Crane, and therefore there was no additional insured coverage available under the Lincoln General and Admiral policies.

In addition, the Court of Appeals will also be reviewing the Appellate Division's holding that the Admiral policy issed to Joy Contracting would not be rendered void ab initio as to Joy's additional insureds, the owners and developers of the project as well as their construction manager, on the basis of Joy's misrepresentations during the application process regarding the nature of its work.      

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