The Additional Insured endorsement at issue in Burlington covered liability for bodily injury “caused, in whole or in part” by the “acts or omissions” of the Named Insured. The Burlington Court held that this meant full-blown proximate cause; the mere fact that the liability-producing bodily injury was “causally linked” to the Named Insured – indeed, would not have happened “but for” the Named Insured – was not enough.
The Burlington court’s reasoning included the following (emphasis supplied):
Here, the Burlington policy endorsement states that the injury must be “caused, in whole or in part” by BSI. These words require proximate causation since “but for” causation cannot be partial. An event may not be wholly or partially connected to a result, it either is or it is not connected. Stated differently, although there may be more than one proximate cause, all “but for” causes bear some connection to the outcome even if all do not lead to legal liability.
In dicta the Court suggested that “arising out of” would provide broader coverage.
The point is not as arcane as it may at first seem: if the injured person is an employee of the Named Insured, it’s likely that, because of the worker’s comp bar, her Complaint will not blame the Named Insured. Indeed, it’s likely that her Complaint won’t even mention the Named Insured. Under Burlington, and the “Eight Corners Rule,” the Additional Insured wouldn’t be entitled to a defense, even if that plaintiff’s injury was, in fact, proximately caused by the Named Insured.
True, after years of litigation the Additional Insured might be able to prove that plaintiff’s injury was proximately caused by the Named Insured, and thus perhaps win reimbursement for massive defense costs, but this is hardly what the average Additional Insured is hoping for, or expects.
The lessons are what they have ever been: Know the differences in “Additional Insured” language. Tell the Named Insured precisely what language you require. And make sure that the Named Insured has in fact obtained that language – a Certificate of Insurance is not enough!
Authored by Robert ("Bob") M. Frey