By Ryan Taylor, Partner at Tressler LLP
The Ninth Circuit Court of Appeals recently asked the Washington Supreme Court to decide whether an insurer is bound by representations made by its authorized agent in a certificate of insurance (“COI”) concerning a party’s status as an additional insured under a policy issued by the insurer when the COI includes language disclaiming its authority and ability to expand coverage.
According to the Ninth Circuit, a direct legal conflict exists between the state’s rule that an insurer is bound by the representations of its authorized agents and the well-established law that a COI cannot alter the terms or define the scope of a policy’s coverage. T-Mobile USA Inc. v. Selective Insurance Company of America, 908 F.3d 581 (9th Cir. Nov. 2018).
The Ninth Circuit’s request for the unsettled issue of law to be resolved stems from a case in which a subsidiary of T-Mobile entered into an agreement with Innovative Engineering (“Innovative”) to construct rooftop cellular antennae towers. Pursuant to the agreement, Innovative was required to maintain general liability insurance naming T-Mobile’s subsidiary as an additional insured. To that end, T-Mobile was provided with a COI appearing to show that it was covered as an additional insured under Innovative’s policy.
However, when property damage occurred related to the construction project and a claim was tendered to Innovative by T-Mobile, Innovative’s insurance company, Selective Insurance Company of America (“Selective”), denied T-Mobile’s claim on the basis that it was not named as an insured and therefore did not qualify as an additional insured.
In litigation dating back to 2013, T-Mobile contends that it is entitled to coverage as an additional insured under Selective’s policy. Although T-Mobile is not identified as an additional insured in the policy, Selective’s authorized agent and insurance broker issued a COI to T-Mobile indicating that T-Mobile was, in fact, an additional insured under Selective’s policy.
Potential Coverage Implications
It is now within the discretion of the Washington Supreme Court to accept or decline the Ninth Circuit’s request – or to reformulate the issue – but in the event the Court takes on the task, its ruling will likely shed light on the true importance of COIs and whether they can be relied on when a company executes an agreement with a third party requiring that the company be named as an additional insured.
Ryan Taylor is a partner at Tressler LLP in their commercial litigation practice and can be reached at email@example.com or 312-627-4032.
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