General Liability Insurers Forced to Make $2 Million of Coverage Available

general liability

We needed to protect our building owner client from having no insurance coverage in a multi-million-dollar general liability Labor Law claim.

The Challenge

A worker was seriously injured when he fell through a hole in a roof on a New York construction project. The injured plaintiff worked for a subcontractor hired to remove asbestos prior to a demolition project by a general contractor. The subcontractor had $1 million of general liability coverage, as did the general contractor. The injured plaintiff sued the subcontractor, general contractor and our client, the building owner. 

New York’s Labor Law imposes strict liability on contractors and building owners when workers fall from elevation, no matter who is at fault, and construction accidents involving serious injuries in the state often result in multi-million-dollar verdicts. The subcontractor’s insurer first tried to avoid liability by claiming there was no proof that the underlying accident was caused by its insured. The injured plaintiff fell through the roof (an elevation), however, and the court imposed strict liability against all of the defendants under the Labor Law, and the injured plaintiff was awarded summary judgment on liability, leaving open the question of damages only. 

Next, the insurance company further tried to avoid liability by asserting that the subcontractor’s asbestos work fell outside the scope of coverage, because the insured’s policy had a classification endorsement listing its work as “carpentry, drywall or wallboard installation, and painting.” Further, the insurer pointed to an endorsement in the policy excluding bodily injury arising from operations taking place “on the exterior sides of a building where the work is performed at a height that exceeds three stories.” 

If the insurer was successful, it would create exposure for the general contractor’s insurance company and its $1 million policy, so the general contractor’s insurance company sued the subcontractor’s insurer, for a declaration that they had to cover the loss. While the case was going on and the parties were going through discovery, the building owner grew increasingly concerned about a lack of coverage for this multi-million-dollar claim. Everybody in the chain liability is fully responsible for the loss: if the subcontractor were put out of business by the claim, and the general contractor could not handle the claim, the building owner would be next in line.   

The Solution

At this point, the building owner hired Schwartz, Conroy & Hack PC to protect its interests. Even though the case had been pending for a long time and was far along in the process, we successfully moved to intervene in the case, so that the building owner could participate in the lawsuit. We then engaged in the latter stages of discovery, which included participating in all depositions. This allowed the firm to glean critical factual information which we then used in drafting summary judgment motions, wherein we convinced the court to force both insurance companies to fully cover the loss for their policy limits of $2 million. 

Our success involved getting the Court to reject the work classification endorsement contained in the subcontractor’s insurance policy. The insurance company asserted that it owed no duty to defend or indemnify because asbestos removal work did not fall within the types of work listed in the classification endorsement. The Court rejected that argument, ruling that the mere listing of the classification without specific policy language limiting coverage for asbestos removal was insufficient to limit coverage under the policy. 

We also defeated the argument that coverage was barred by the three-story height limitation endorsement. First we established that the insurance company never raised the height limitation endorsement as part of its denial of coverage and got the Court to agree that the insurance company waived its right to deny coverage on this ground. Next, we got the Court to rule that the height exclusion did not apply because work performed “on the exterior sides of a building” was not for work performed on the roof from where the plaintiff fell. 

The Result

As a result of this ruling, Schwartz, Conroy & Hack PC obtained summary judgment against the insurance companies and ensured that our client has $2 million of available general liability coverage from the insurance companies to resolve this case. 

We recognized as a firm that we could intervene in the pending lawsuit even if the parties did not consent. As they did not consent, we secured a court order authorizing our client to intervene. We then used our litigation experience and knowledge of insurance law to conduct targeted discovery and obtain summary judgment to protect the client’s right to its $2 million in insurance coverage and protect the asset that the insurance was designed to protect – the building. We made the insurance companies keep their promises to the insured.

Contact us today for a free consultation.


Evan S. Schwartz
Founder of Schwartz, Conroy & Hack