|

An employee of a trucking contractor brought an action against a landowner, alleging that the landowner's negligence caused an accident resulting in injuries to the employee. The dispute centered around the additional insured status of the landowner. This case is Peabody Energy Corporation v. Roark, 973 N.E.2d 636 (2012).

 Peabody owns property where it conducts mining operations. Beelman is a trucking company. Beelman and Peabody entered into a performance agreement in which Beelman agreed to indemnify, defend, and hold harmless Peabody against all claims, damages, losses, and expenses because of bodily injury arising out of or in consequence of the performance of the work called for by the contract.

 Beelman purchased a commercial general liability policy from North American Capacity Insurance Company (NAC), and had an additional insured endorsement added to the policy providing coverage for “any person or organization to which you are obligated by virtue of written contract to provide insurance such as is afforded by this policy, but only with respect to occurrences taking place after such written contract has been executed, and occurrences resulting from work performed by you during the policy period”. The who is an insured clause was amended to include as an insured the person or organization shown in the schedule as an insured “but only with respect to liability arising out of your operations or premises owned by or rented to you”.

 A certificate of liability insurance was issued to Peabody referencing the policy by number. The certificate named Peabody as the certificate holder and declared that the certificate holder “is an additional insured with respect to the auto and general liability”.

 Roark was employed by Beelman as a truck driver. While working for Beelman, Roark delivered a load of ash to Peabody's mine. Roark backed the truck into a spot at the mine to dump the load of ash. He then got out of the truck to release the air brakes and as he walked toward the trailer to release the switches, the ground gave way and Roark went down into the ground past his knee. Roark was injured and filed a lawsuit against Peabody, alleging that its negligence in maintaining its property caused the injuries. Peabody demanded coverage from NAC, but the insurer denied coverage. Peabody filed a third-party complaint requesting coverage, but the trial court ruled in favor of the insurer. This appeal followed.

 Peabody argued that it was entitled to coverage from NAC as an additional insured under Beelman's policy. The appeals court noted that the who is an insured clause was amended to include Peabody as an additional insured with respect to liability arising out of the operations of Beelman or premises owned by or rented to Beelman. The court said that the issue in this case is whether the liability arises out of Beelman's operations, not whether the liability arises out of the ownership of premises. The court found that, based on the facts of the incident, Roark's injuries were directly related to his work as truck driver for Beelman. Regardless of whether Roark was injured because of Peabody's sole negligence, the evidence showed that Roark's injuries arose out of Beelman's operations. Thus, Peabody is an additional insured under the terms of the policy. The opinion of the trial court was reversed.

Editor's Note: The appeals court in this case did not base its decision on whether Peabody was negligent in maintaining its property, even though that is the basis on which Roark made his claim. The decision to grant additional insured status to Peabody was based on whether the injuries arose out of the named insured's operations. The facts of the accident showed that is what happened and so, the language of the additional insured endorsement was upheld.

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis