May 17, 2018 Sophisticated insureds can’t understand additional insured either Scottsdale Insurance v United Rentals US Dist Ct. Massachusetts (2018) FACTS Gomes had Scottsdale Insurance and when Gomes rented a lift from United Rentals it added United Rentals as additional insured. A Gomes employee was operating the lift when it caused personal injury to Ayotte. Ayotte sued United Rentals who claimed Scottsdale had a duty to defend it Additional insured coverage said it applied: only for Liability for Bodily injury or Property Damage CAUSED (in whole or in part) BY The acts or omissions of the named insured Gomes ISSUE 1 CAUSED BY WHAT? Was additional insured coverage for United Rentals triggered when someone established Liability caused by the named insured Gomes? Or Bodily Injury or Property damage caused by the named insured Gomes? HOLDING 1 United Rentals was additional insured for all injuries caused by acts of the named insured. Since the act of operating the lift caused the injury, that was enough. ____________________________________________________________________ ISSUE 2 – WHOSE INSURANCE IS PRIMARY WHOSE IS EXCESS? FACTS – United Rentals established that is was additional insured under the Scottsdale policy for injuries caused by operation of the lift. But United Rentals had two policies of its own. Scottsdale’s policy said it was excess unless it was specifically required to be primary. Nothing in the facts had such a requirement. The judge interpreted Scottsdale’s policy to be excess. United Rentals had two policies an “ACE Ultimate Net Loss Policy” written on excess insurance template and calling itself “excess of other insurance”. The judge interpreted this policy to be excess also. United Rentals had a “Fronting Policy” which was essentially a self-insured retention (per each occurrence $2M deductible with $2M coverage). It was excess over other primary coverage – but the judge determined the Scottsdale policy was excess not primary. HOLDING 2 Self-insurance can be the considered primary layer over which an excess policy sits. United Rentals, despite being additional insured on the Scottsdale policy – sat primary to its excess here. COBB COMMENTARY These additional insured issues are impossible for mortals to anticipate.