Kenneth Kaiser was injured after he fell into an open manhole on Pulte’s construction site. Kaiser sued Kunde Construction, the sewer subcontractor and Pulte bringing negligence and premises liability claims. Prior to the accident, Kunde Construction purchased an insurance policy from Pekin, naming Pulte as an additional insured.
Pulte tendered its defense to Pekin. Pekin denied Pulte’s tender and filed a declaratory judgment action. In response, Pulte filed a motion for summary judgment. The trial court granted Pulte’s summary judgment motion; Pekin appealed.
The Additional Insured endorsement was limited to “liability incurred solely as a result of some act or omission of the named insured and not for its own independent negligence or statutory violation.”
Pekin contended that Kunde Construction’s insurance policy covered Pulte for only vicarious liability arising from Kunde Construction’s alleged negligence. Pekin believed that Pulte faced only direct liability for its own allegedly negligent acts which was excluded. Pekin focused on allegations of the underlying complaint which presented theories of both direct and vicarious liability against Pulte. The Appellate Court reviewed the relevant pleadings and documents, including the contract between Pulte and Kunde Construction.” The court found that the language of the subcontract agreement between Pulte and Kunde Construction clearly established Kunde Construction’s intent to fully defend and indemnify Pulte against any and all claims. Additionally, the court relied on the fact that the purpose of the policy at issue supported a duty to defend. Because the plaintiff was injured due to Kunde Construction’s operations, Pulte should be covered under Kunde Construction’s policy. Further, the court noted that until Kunde Construction’s liability was established, Pekin had a duty to defend Pulte as an additional insured.