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Man vs. Mannequin
by Ron Davis

An insurance company has failed in its attempt to avoid honoring the liability coverage it provided for a tenant of a Louisiana shopping center.

The shopping center is Pecanland Mall in Monroe, and the coverage was for a construction project to remodel the premises of the tenant, a Sears, Roebuck & Co. store located there. The construction company handling the project contracted with the insurance company for liability protection and agreed to include Sears in the coverage in a separate contract.

Sears had in fact insisted on the coverage. As part of the construction contract, the construction company agreed to "protect, defend, indemnify, and hold harmless Sears, its consultants, their agents and employees from and against all claims" made against the construction company. In keeping with that contract, the construction company had added Sears as an insured under the liability policy with the insurance company.

But that contract was soon to be tested. During work on the project, an employee of a subcontractor hired by the construction company was injured while installing telephone jacks in the Sears store. The accident occurred when a Sears employee, in storing a retail display mannequin on a shelf above where the subcontracter's employee was working, failed to secure the mannequin properly and it fell and struck the subcontractor's employee in his back.

The subcontractor's employee sued Sears and the insurer of the construction project. But the insurance company, while admitting covering the construction company, denied that such coverage extended to Sears or its employees.

A Louisiana Court, in ruling in favor of Sears, explained, "The accident in which the injury occurred arose out of...the remodeling of the Sears store. The section of the store where the injured employee was working was being renovated as part of the remodeling project. He was performing work which was necessary for the installation of a cash register.... The Sears worker who moved the mannequin while preparing displays was also working in conjunction with the remodeling and grand reopening of the store. Consequently, coverage under the policy is afforded to Sears. And since the policy provided coverage for Sears, the insurance company owed a duty to defend Sears in the lawsuit against it." (Baker v. Sears, Roebuck & Co., 753 So. 1011 [La.App. 2 Cir. 2000])

Decision: March 2000

Published: May 2000



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