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Foresight is Forearmed
by Ron Davis

A little foresight about insurance coverage has protected the owners of a Texas shopping center from being targeted in a potentially expensive lawsuit.

The shopping center is Highland Park Shopping Village, located in the Dallas area. And the insurance coverage means that an employee of a plumbing contractor must seek redress from the contractor’s insurer for an injury he suffered at the center.

For a while after the injury, however, the shopping center owners seemed headed for the courts. The injury to the contractor’s employee occurred after he completed some plumbing work at the center. As he was returning to his vehicle, he used a vertical conveyor belt (known as a "Man Lift") to ascend from the basement of the center to the floor of the garage deck where he had parked. The conveyor belt slipped during the ascent, causing his injury.

The injured worker eventually sued the shopping center owners, claiming that the Man Lift was unsafe and therefore that the owners were negligent in failing to properly maintain the device.

The shopping center owners pointed out, however, that the insurance policy issued to the plumbing contractor protected them from lawsuits. In fact, not only was the contractor apparently fully insured from liability, but also an "additional insured endorsement" to the policy seemed to protect the shopping center and its owners as well.

The shopping center owners therefore demanded that the contractor’s insurer "indemnify" them by paying any monetary damages that the courts may decide they owe. But the insurer refused, arguing that the center’s owners were not covered because the injured worker’s lawsuit alleged negligence only on their part and not that of the contractor-employer’s.

A county court ruled in favor of the insurer. The shopping center owners then appealed.

A Texas appellate court reversed the lower court, explaining, "As the employee’s injury occurred while he was on the premises to do the work of his employer, his injury arose out of his work and the shopping center owners were covered as additional insureds.... They, as additional insureds, are entitled to be indemnified for the lawsuit." (Highland Park Shop. v. Trinity Univer. Ins., 36 S.W.3d 916 [Tex.App.--Dallas 2001])

Decision: February 2001
Published: April 2001



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