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New York's Highest Court Limits Additional Insured Coverage

New York's Highest Court, the NY Court of Appeals, issued a decision holding that the phrase "caused by your acts or omissions" in the additional insured endorsement requires that the named insured wrongful actions be a proximate cause of the accident. The Court of Appeals reversed the Appellate Division which had held that it was the same as "arise out of" such that employee injuries always created additional insured coverage. The decision narrows the coverage an requires some affirmative fault on the part of the named insured for the coverage to apply.

As summarized by the majority of the Court of Appeals:

"We conclude that where an insurance policy is restricted to liability for any bodily injury "caused, in whole or in part" by the "acts or omissions" of the named insured, the coverage applies to injury proximately caused by the named insured. The Appellate Division erroneously interpreted this policy language as extending coverage broadly to any injury causally linked to the named insured, and wrongly concluded that an additional insured may collect for an injury caused solely by its own negligence, even where the named insured bears no legal fault for the underlying harm. We reject this "but for" causation formulation of the policy and, on this appeal, reverse the Appellate Division's denial of summary judgment in favor of the insurance company on the issue of coverage."

Burlington Ins. Co. v. NYC Transit Auth., No. 57, 2017 WL 2427300 (N.Y. June 6, 2017)

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