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Which Insurance Company Pays?
by Ron Davis

Owners of a New York shopping center have found themselves in the middle of a dispute primarily involving insurance companies.

The dispute is between Zurich American Insurance Company and Wausau Business Insurance. And the cause of the dispute focuses on the question of which of the two is obligated to “defend and indemnify” the center’s owners and management when needed. Such a need might occur if a visitor to the center is injured while on center property and then sues.

In fact, that is exactly what happened: A visitor to the center slipped and fell while walking by or through a construction site located at the Brooks Shopping Centers owned Cross Country Shopping Center. She alleged that the accident resulted from dangerous conditions caused by “ongoing construction.”

The property owner is Brooks Shopping Centers, LLC, in Yonkers which also owns nearby Cross Country Shopping Center, where the shopper was injured. Complication eventually arose when Brooks contracted with Whiting-Turner Contracting Company to oversee and coordinate construction at the shopping center.

To make matters more complex, under the contract between Brooks and Whiting-Turner, Whiting is required to purchase and maintain insurance to protect against claims “that may arise out of or result from the contract in connection with the project.”

So when the visitor to the shopping center slipped and fell and suffered the serious injury, she sued Cross County Shopping Center’s owners. She alleged that Brooks “created a dangerous condition by failing to adequately protect her from ongoing construction.”

She added that such negligence was the cause of her fall and injury. She also argued that as a result of her fall, she suffers severe pain, and she sought compensation amounting to $1,000,000 (which she has not yet received).

Zurich American, however, argued the “insurer exception” on the basis that the company was acting on behalf of its insurer. But the courts rejected that reasoning, explaining that Wausau’s bid for favorable conditions was granted. Zurich’s motion for summary judgment, however, was denied.

(Zurich American Insurance Company. Inc. v Wausau Business Insurance Company, F. Supp.3 3d.2016 WL 4532196)

Decision: October 2016 Published: November 2016



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