Walsh had a general liability policy with Arch and this policy had an additional insured endorsement attached that was titled "Additional Insured—Lessor of Leased Equipment—Automatic Status When Required In Lease Agreement With You". Walsh did enter into a written lease agreement with Stone for the use of the scaffolding equipment before the accident that injured Hansen.

After Hansen sued Stone, Stone's insurer tendered the defense to Arch. Arch denied coverage, asserting that Stone did not qualify as an additional insured because there was no written agreement or contract between Stone and Walsh adding Stone as an additional insured as required by the policy. Arch then filed this declaratory judgment action.

As noted, Arch said there was no coverage for Stone because there was no written agreement adding Stone as an additional insured. Stone responded that there was a written agreement that included a condition requiring Walsh to provide Stone with proof of general liability insurance naming Stone as an additional insured. Stone said that Walsh understood this and sent certificates of insured to Stone on a regular basis throughout the years. The United States District Court for the Northern District of Illinois noted that one certificate names Arch as the insurer and Walsh as the insured and that apparently, the certificate refers to the policy.

The court said that even if the certificate describing the policy does not extend coverage to Stone as an additional insured, it is plausible that a written agreement exists that properly adds Stone as an additional insured considering that the policy does have an additional insured endorsement attached to it. Moreover, the court found that Arch presented no evidence establishing that no such written agreement exists. Accordingly, the court denied Arch's motion for summary judgment.

Editor's Note: The U.S. District Court noted that while usually a certificate of insurance does not confer rights on the certificate holder by qualifying the holder as an additional insured, in this instance, the certificate clearly referred to the policy that had the additional insured endorsement attached. So, the motion by the insurer for summary judgment on the basis that the certificate of insurance did not explicitly add Stone as an additional insured was denied.