Additional insured status useless due to anti-indemnity laws

MAXIM CRANE WORKS, LP v. ZURICH AMERICAN INSURANCE COMPANY,

Dist. Court, SD Texas 2019

FACTS

Crane lessor Maxim leased its crane ‘as is’ to Berkel on a Skanska job. Maxim became additional insured on Berkel’s Zurich general liability policy.

Berkel, a Skanska subcontractor was enrolled in the Contractor Controlled Insurance Policy.

A Berkel employee overtaxed the crane causing the Skanska superintendent to get badly injured.

The superintendent received workers compensation but could not sue its direct employer Skanska. 

The superintendent sued Berkel and Maxim.  The jury found Berkel 90% responsible and Maxim 10% at fault.

The Texas appeals court determined that since both Berkel and Skanska were enrolled in the Contractor Controlled Insurance Policy, Berkel was immune from suit as a “statutory employer” due to the workers compensation exclusivity bar.  

Maxim claimed it was owed defense and indemnity as additional insured under the Berkel GL policy written by Zurich.

ISSUE

How does the Texas anti-indemnity law apply?

It allows a party to indemnify another in limited circumstances, but it disallows indemnification for claims caused by the party seeking indemnification.

HOLDING

No indemnity for Maxim as additional insured since it was alleged and found to have been negligent itself.

REASONS

The crane lessor could not get around the anti-indemnity law making its agreement void because the jury found it was 10% responsible for causing the accident.  Costs from that are blocked from being passed on to others -even additional insured status did not give protection to the crane lessor.

COMMENT

Clever plaintiffs should allege negligence up and down the line.  Lessor’s fault here is not obvious.