Additional Insured Endorsement Covering Work Performed By Named Insured For Additional Insured Does Not Insure Lessor Under Lessee's Policy

In Admiral Ins. Co. v. Joy Contractors, Inc., a tower crane operated by Joy Contractors Inc. that had been leased from New York Crane, collapsed during the construction of a high-rise condominium project, resulting in the deaths of seven people. Joy was insured for the project under a Commercial General Liability (CGL) policy issued by Lincoln General Ins. Co. and an excess liability policy issued by Admiral Ins. Co.

New York Crane sought additional insured coverage from Lincoln and Admiral under an additional insured endorsement which provided that "all insureds shown in a written contract, or agreement. . ." are additional insureds, "but only with respect to liability . . . caused . . . by [Joy's] acts or omissions; or . . . [t]he acts or omissions of those acting on [Joy's] behalf; in the performance of [Joy's] ongoing operations for the additional insured(s)" (emphasis added).

In affirming the denial of coverage to New York Crane, the First Department rejected the contention that "Joy's contractual obligation to follow industry standards in its operation of the crane leased to it by New York Crane transformed Joy into a party working 'for' or 'on behalf' of New York Crane. Plainly, the parties had a lessor/lessee relationship, which could have been insured by an appropriate endorsement, such as one for leased equipment (see e.g. Westchester Fire Ins. Co. v Continental Cas. Co., 2006 WL 786866, 2006 Minn App Unpub LEXIS 274 [Minn App 2006])."