October 2025 New York Insurance Coverage Update

Southern District Finds SIR Endorsement Does Not Apply To Additional Insured

Two underlying actions were filed against US Crane & Rigging LLC and its subcontractor, NY Crane Hoist Operations LLC, for damages caused by unsecured cranes at a building project during Hurricane Zeta. Liberty Mutual Fire Insurance Company defended its named insured, US Crane, in both actions until one was settled and the other dismissed. Liberty then filed an action against Ategrity Specialty Insurance Company, the insurer for NY Crane, seeking reimbursement of defense costs it paid to defend US Crane in the underlying actions, and both parties filed cross-motions for summary judgment. Ategrity did not dispute that US Crane is an additional insured under its policy. Instead, Ategrity argued it is not obligated to pay US Crane’s defense costs until NY Crane pays $350,000 under a Self-Insured Retention Endorsement in the Ategrity policy, which states that Ategrity’s obligation to pay damages or expenses under the policy only applies after “you” – defined as a named insured – pay $350,000. The Southern District of New York granted Liberty’s motion, finding that the SIR Endorsement does not apply to US Crane, an additional insured under the Ategrity policy. The court explained, “The SIR Endorsement never mentions additional insureds anywhere. Nor does it expressly require named insureds to fulfill their obligations under the SIR Endorsement for additional insureds before the policy activates.” The court concluded, “Without a textual basis for concluding that the SIR Endorsement applies to additional insureds, there is no good reason for extending the ‘deductible’ requirement to US Crane’s costs.” [Liberty Mut. Fire Ins. Co. v. Ategrity Specialty Ins. Co., No. 25-cv-2170 (JSR), 2025 U.S. Dist. LEXIS 178822 (S.D.N.Y. Sept. 12, 2025).]

Southern District Finds Named Insured’s Failure To Satisfy Conditions In New York Limitation Endorsement Results In No Indemnity Coverage For Additional Insureds

A worker was injured at a construction project and filed an action against 48 Wall LLC, the property owner, and InsideSquad, Inc., the general contractor for the project. They, in turn, impleaded DATO A/C Inc., the project’s HVAC subcontractor, and Star Heating & Cooling Corp., DATO’s subcontractor and the worker’s employer. LM Insurance Company, 48 Wall’s insurer; James River Insurance Company, InsideSquad’s insurer; and 48 Wall’s excess insurer settled the action for $2.6 million. Arch Specialty Insurance Company, DATO’s insurer, disclaimed coverage and did not contribute to the settlement. LM filed an action against James River and Arch seeking a declaration that 48 Wall is an additional insured under the James River and Arch policies and reimbursement of amounts paid, and James River asserted crossclaims seeking a declaration of additional insured coverage for InsideSquad under the Arch policy. James River and LM settled a portion of their dispute, and the parties filed cross-motions for summary judgment as to the remaining issues. The motions centered on whether DATO’s failure to comply with conditions in a New York Limitation Endorsement in the Arch policy precludes additional insured coverage for 48 Wall and InsideSquad under the Arch policy. The Endorsement excludes coverage for bodily injury to “any ‘worker’” that arises out of work or operations performed on “your” – DATO’s – behalf by a subcontractor unless the subcontractor (1) has its own $1 million liability policy naming DATO as an additional insured and (2) agrees in writing to defend, indemnify, and hold harmless DATO for injury arising out of the subcontractor’s work. According to the insurers’ Investigations, DATO did not have a written subcontract with Star. The Southern District of New York found that Arch does not have a duty to indemnify 48 Wall and InsideSquad for their liability to the worker because DATO, the named insured under the Arch policy, failed to comply with the Endorsement’s enumerated conditions when subcontracting with Star. The court rejected the other insurers’ arguments that (1) the Separation of Insureds provision requires the court to look at whether 48 Wall and InsideSquad, not DATO, complied with the conditions, and (2) the Additional Insured Endorsement in the Arch policy renders the Endorsement ambiguous. The court, however, found that Arch had a duty to defend 48 Wall and InsideSquad because, up until the court’s ruling, there was uncertainty as to whether Arch “might be held liable to indemnify” 48 Wall and InsideSquad in the action. [LM Ins. Corp. v. James River Ins. Co., No. 22-cv-7472 (DEH), 2025 U.S. Dist. LEXIS 189320 (S.D.N.Y. Sept. 25, 2025)].