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Targeted Tenders in Illinois
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Targeted Tenders in Illinois

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A summary of the history and current state of the law in Illinois on targeted tenders.

A summary of the history and current state of the law in Illinois on targeted tenders.

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  • Chicago Hospital Risk Pooling Program v. Illinois State Medical Inter-Insurance Exchange, 325 Ill.App.3d 970, 987, 758 N.E.2d 353 (2001) (Quinn, J., specially concurring).
  • Statewide Ins. Co. v. Houston General Ins. Co., ___ Ill.App.3d ___, 920 N.E.2d 611, 627 (2009), citing Richard Marker Associates v. Pekin Ins. Co., 318 Ill.App.3d 1137, 1144, 43 N.E.2d 1078 (2001).
  • Targeted tenders are unique to Illinois.Targeted tender issues typically arise in construction cases, because of the extensive contractual arrangements among parties in relation to a construction project. However, a recent decision by the appellate court found that a targeted tender had been made properly by a physician in a medical malpractice case. Chicago Hospital Risk Pooling Program v. Illinois State Medical Inter-Insurance Exchange, 2010 WL 305356 (Jan. 26, 2010).Targeted tenders are not permissible in auto cases, because the concept would conflict with the public policy underlying mandatory insurance.
  • An insured who is covered by multiple and concurrent insurance policies has the “paramount right” to select, or “target,” which insurer will defend and indemnify it with respect to a specific claim.
  • In John Burns Construction Co. v. Indiana Insurance Co., 189 Ill.2d 570, 727 N.E.2d 211 (2000), the Illinois Supreme Court adopted the reasoning of London Underwriters, Bituminous Casualty and Alcan United, holding that coverage under multiple policies must be triggered by the insured before the insurer on any of those policies is entitled to invoke the “other insurance” clause of its own policy.Up until this time, there had been disagreement among the Appellate Court districts about the application of London Underwriters, because the insurer seeking equitable contribution in that case had no “other insurance” clause in its policy. The Supreme Court addressed that issue first, holding that the presence or absence of an other insurance clause was not determinative of the effectiveness of a targeted tender. In John Burns Construction, both policies contained other insurance clauses. However, that was irrelevant because the insured’s election of coverage controlled.The court observed that an “other insurance” clause in a policy will not automatically reach into coverages provided under other policies merely because they are in existence. The insured still must be given the right to determine whether it wishes to invoke its right to such other coverages before those policies become available under the “other insurance” provision of a triggered policy.The court also noted that nothing in the insurance policy at issue limited the right of the insured to select which insurer would be required to defend and indemnify it. See also, American Country Ins. v. Kraemer Bros., 298 Ill.App.3d 805, 699 N.E.2d 1056 (1998).
  • It is now well-settled that Illinois applies the principle of horizontal exhaustion of policy limits. The insured must first exhaust all available primary coverage, including uninsured periods and self-insured periods, before an excess policy can be reached. Kajima Construction Services, Inc. v. St. Paul Fire and Marine Ins., 227 Ill.2d 102, 879 N.E.2d 305 (2007). See also, Maremont Corp. v. Continental Casualty Co., 326 Ill.App.3d 272, 760 N.E.2d 550 (2001), appeal denied, 198 Ill.2d 617, 770 N.E.2d 220 (2002); Missouri Pacific Railroad Co. v. International Insurance Co., 288 Ill.App.3d 69, 679 N.E.2d 801 (1997), appeal denied, 174 Ill.2d 567, 686 N.E.2d 1164 (1997); United States Gypsum Co. v. Admiral Insurance Co., 268 Ill.App.3d 598, 643 N.E.2d 1226 (1994), appeal denied, 161 Ill.2d 542, 649 N.E.2d 426 (1995).
  • In Kajima Construction Services, Inc. v. St. Paul Fire and Marine Insurance, 227 Ill.2d 102, 879 N.E.2d 305 (2007), the Illinois Supreme Court held “the targeted tender rule does not preempt horizontal exhaustion.” 227 Ill.2d at 117, 879 N.E.2d at 315.Once concurrent primary coverage has been exhausted, an insured may selectively tender its indemnity to concurrent excess insurers. North River Ins. Co. v. Grinnell Mutual Reinsurance Co., 369 Ill.App.3d 563, 574, 860 N.E.2 460, 470 (2006).
  • In Shell Oil Co. v. AC&S, Inc., 271 Ill.App.3d 898, 649 N.E.2d 946 (1995), the plaintiff was employed by a subcontractor that obtained a commercial general liability policy naming the general contractor as an additional insured. The additional insured endorsement covered any liability of the additional insured as long as that liability “arose out of” the subcontractor's operations.The plaintiff was injured while on the general contractor's premises and in furtherance of his employment with the subcontractor. His injury occurred when he tripped over a pipe while walking on a path at the jobsite.The court found that plaintiff's injuries arose from the operations of the subcontractor on the general contractor's premises. The court explained that the injuries would not have occurred “but for” the plaintiff's employment by the subcontractor and the subcontractor's presence on the general contractor's premises.See also, Maryland Cas. Co. v. Chicago & Northwestern Transportation Co. 126 Ill.App.3d 150, 466 N.E.2d 1091, 1094 (1984) (defining term “arising out of”).
  • Liberty Mutual Ins. Co. v. Westfield Ins. Co., 301 Ill.App.3d 49, 703 N.E.2d 440 (1998) The phrase “arising out of” is broad and vague and must be liberally construed in favor of the insured; accordingly, “but for” causation, not necessarily proximate cause satisfies this language.”The policy at issue defined “your work” as “work or operations performed by you or on your behalf.” The plaintiff’s claims were based on theories of common law negligence and violations of the Illinois Structural Work Act (740 ILCS 150 (West 1994).
  • Schal Bovis, Inc. v. Casualty Ins. Co., 315 Ill.App.3d 353, 732 N.E.2d 1179 (2000).The underlying lawsuit alleged that the named insured and other defendants were present during the course of the erection of the building on which the plaintiff worked; that these defendants participated in coordinating the work being done; that they designated various work methods, were responsible for inspecting the work and had authority to stop the work in the event it was being done in a dangerous manner. The complaint further alleged that the defendants put in place a certain beam to be used with the work and that the beam's use violated the Structural Work Act in that the beam was not a safe or suitable support for the protection of the plaintiff. The complaint further alleged that each of the defendants failed to erect an appropriate scaffold.Such allegations were sufficient to trigger coverage on behalf of the additional insured. The plaintiff’s injuries were alleged to have occurred in connection with work which was supervised by the named insured. Therefore, the additional insured was entitled to coverage under the employer’s policy.
  • In Casualty Ins. Co. v. Northbrook Property & Cas. Co., 150 Ill.App.3d 472, 501 N.E.2d 812 (1986), the policy provided that the construction manager was an additional insured “but only with respect to liability arising out of operations performed for the additional insured by” the named insured at the construction site. The underlying complaint alleged that the plaintiff was injured while working at the site. Since the plaintiff’s employer was performing operations pursuant to its contract with the named insured at the time the injuries occurred, any liability on the part of the construction manager would arise out of operations performed for it by the named insured. Thus, the additional insured is entitled to coverage under the additional insured endorsement.The endorsement provides that the additional insured is an insured for liability “arising out of operations” performed for it by the named insured. There is no reference in the endorsement requiring the fault of the named insured. The additional insured’s potential liability to the underlying plaintiff arises from the fact that his employer was performing work for the named insured, which in turn was performing operations for the additional insured. Therefore, regardless of the role of any acts or omissions of the named insured, the additional insured is entitled to a defense.See also, American Country Insurance Co. v. James McHugh Construction Co., 344 Ill.App.3d 960, 801 N.E.2d 1031 (2003), appeal denied, 208 Ill.2d 533, 809 N.E.2d 1284 (2004), in which the insurance provided to additional insureds was limited as follows:(1) The person or organization is an additional insured but only with respect to your acts or omissions in connection with ‘your work’ for that additional insured by you or on your behalf at the location designated in the agreement and designated in a Certificate of Insurance issued by our authorized producer.
  • In American Country Insurance Co. v. James McHugh Construction Co., 344 Ill.App.3d 960, 801 N.E.2d 1031 (2003), appeal denied, 208 Ill.2d 533, 809 N.E.2d 1284 (2004), the complaint alleged that the general contractor constructed or erected a scaffolding from which the plaintiff fell, and that the general contractor failed to: (1) inspect, manage and supervise the jobsite; (2) warn the plaintiff of dangerous conditions; or (3) provide adequate safeguards to prevent the plaintiff’s injury. The plaintiff’s employer was not a named defendant and was never joined as a third-party defendant. Accordingly, no acts or omissions on the part of the employer were alleged to have caused the plaintiff's injuries.The underlying complaint only alleged negligence on the part of the additional insured. The additional insured endorsement did not cover the direct negligence of the additional insured. Therefore, the additional insured was not entitled to a defense as a matter of law.See also, National Union Fire Insurance Co. of Pittsburgh, Pennsylvania v. R. Olson Construction Contractors, Inc., 329 Ill.App.3d 228, 769 N.E.2d 977 (2002), in which the complaint against the additional insured alleged that various negligent acts or omissions by it caused the plaintiff’s injuries. The plaintiff’s employer, the named insured, was not named as a defendant in the underlying lawsuit. In American Country Insurance Co. v. Cline, 309 Ill.App.3d 501, 722 N.E.2d 755 (1999), the policy at issue provided coverage for the additional insured only for liability resulting from conduct of the named insured.Similarly, in American Country Ins. Co. v. Cline, 309 Ill.App.3d 501, 722 N.E.2d 755 (1999), the underlying complaint alleged that the general contractor “was actively engaged in the supervision, management and control of the repairs, alterations or construction” and as a result, it “carelessly and negligently” failed to secure a conduit pipe to the ceiling, failed to design and provide adequate support for the electrical piping, failed to warn that the overhead pipe was not properly secured, failed to warn of the insecure pipe, removed the supports for the conduit, and failed to remove the conduit in smaller sections, as a result of which the plaintiff was injured. There was no coverage for the additional insured because the complaint did not allege negligence by the plaintiff’s employer, or negligence that could be imputed to the general contractor. The only mention of the employer was that the plaintiff was employed by it and that it was engaged to perform certain electrical work on the project.
  • E.g., United States Fire Ins. Co. v. Aetna Life and Casualty Co., 291 Ill.App.3d 991, 684 N.E.2d 956 (1997).
  • American Country Insurance Co. v. James McHugh Construction Co., 344 Ill.App.3d 960, 801 N.E.2d 1031 (2003), appeal denied, 208 Ill.2d 533, 809 N.E.2d 1284 (2004).The insurance provided to additional insureds is limited as follows: (1) The person or organization is an additional insured but only with respect to your acts or omissions in connection with ‘your work’ for that additional insured by you or on your behalf at the location designated in the agreement and designated in a Certificate of Insurance issued by our authorized producer. (2) Additional exclusions. This insurance does not apply to: (c) ‘Bodily Injury’ or ‘property damage’ arising out of any act or omission of the additional insured(s) or any of their employees.”In the underlying lawsuit, the complaint alleged that the general contractor constructed or erected a scaffolding from which the plaintiff fell, and that the general contractor failed to: (1) inspect, manage and supervise the jobsite; (2) warn the plaintiff of dangerous conditions; or (3) provide adequate safeguards to prevent the plaintiff’s injury. The plaintiff’s employer was not a named defendant and was never joined as a third-party defendant. Accordingly, no acts or omissions on the part of the employer were alleged to have caused the plaintiff's injuries.The plaintiff was an employee of the named insured who was injured in the course of his employment. The underlying complaint only alleged negligence on the part of the additional insured. The additional insured endorsement did not cover the direct negligence of the additional insured. Therefore, the additional insured was not entitled to a defense as a matter of law.
  • In National Union Fire Insurance Co. of Pittsburgh Pennsylvania v. R. Olson Construction Contractors, Inc., 329 Ill.App.3d 228, 769 N.E.2d 977 (2002), there was no coverage for the additional insured because all of the allegations against it were for its own negligence.The complaint did not allege that the additional insured was somehow strictly liable or vicariously liable for the named insured's conduct. There was no indication that the named insured was anything but an independent contractor, so the additional insured could not be vicariously liable its negligent acts. There were no allegations in the underlying complaint that the additional insured was vicariously liable because it retained control over the operative details of the named insured's work.
  • American Country Insurance Co. v. Cline, 309 Ill.App.3d 501, 722 N.E.2d 755 (1999).The “BLANKET ENDORSEMENT FOR ADDITIONAL INSUREDS” stated that, “[i]n consideration for a Flat Premium Charge of $150.00, it is understood and agreed that this policy is amended to include * * * Blanket Endorsement for Additional Insureds-as per conditions in form AC 2030M.”Form AC 2030M defined “additional insureds” as follows:“1. ‘Who is an Insured’ is amended to include as an Insured the person or organization shown in the schedule as an Additional Insured. The coverage afforded to the Additional Insured is solely limited to liability specifically resulting from the conduct of the Named insured which may be imputed to the Additional Insured.* * *3. This endorsement provides no coverage to the Additional Insured for liability arising out of the claimed negligence of the Additional Insured, other than which may be imputed to the Additional Insured by virtue of the conduct of the Named Insured.”The complaint alleged that the general contractor “was actively engaged in the supervision, management and control of the repairs, alterations or construction” and as a result, it “carelessly and negligently” failed to secure a conduit pipe to the ceiling, failed to design and provide adequate support for the electrical piping, failed to warn that the overhead pipe was not properly secured, failed to warn of the insecure pipe, removed the supports for the conduit, and failed to remove the conduit in smaller sections, as a result of which the plaintiff was injured.The complaint did not allege any negligence by the plaintiff’s employer, much less negligence that could be imputed to the general contractor. The only mention of the employer was that the plaintiff was employed by it and that it was engaged to do “certain electrical work” on the project. This sort of claim lies outside the scope of the additional insured endorsement because it does not allege the sole negligence of the named insured that may be imputed to the general contractor.
  • American Country Insurance Co. v. Kraemer Brothers, Inc., 298 Ill.App.3d 805, 699 N.E.2d 1056 (1998).
  • Despite the fact that “prejudice inescapably results.” Richard Marker Associates v. Pekin Ins. Co., 318 Ill.App.3d 1137, 1144, 743 N.E.2d 1078 (2001).
  • I.e., simply by sending it a letter.
  • Few plaintiffs attorneys would fail to allege direct negligence of the general contractor based on retained control, as well as failure to implement an adequate safety policy, failure to conduct proper and timely inspections, etc.The complaint will not always contain obvious allegations of negligence on the part of an employer/subcontractor, since the employer cannot be sued directly.Defense under a reservation of rights may entitle the tendering party to select its own defense counsel. Therefore, defending a claim under a reservation of rights, or also filing a declaratory judgment action, can result in substantial litigation costs. The court will resolve any doubts regarding coverage in favor of the insured, and resolution of the declaratory judgment action may defend on facts to be determined in the underlying litigation.Where possible, a cost-efficient plan of action may be to attempt to reach an agreement with other insurers concerning allocation of defense costs and indemnity.
  • Rule of mutual exculpation provides that when parties to a business transaction mutually agree that insurance will be provided as part of the bargain, then that agreement must be interpreted as providing mutual exculpation to the parties. See, General Cigar Co. v. Lancaster Leaf Tobacco Co., 323 F.Supp. 931 (D.Md. 1971). Although Illinois has employed two analytical approaches to the purchase of insurance in the context of contractual indemnification, the dispositive issue in both is whether a settlement or judgment within the policy limits was reached and fully funded by the insurer. Even those cases that have held that contribution was barred by the rule of mutual exculpation have been within a factual context in which the parties’ joint insurance had absorbed the entire liability of the party seeking contribution. See, Kehoe v. Commonwealth Edison, 296 Ill.App.3d 584, 588, 694 N.E.2d 1119, 1122 (1998).Virginia Surety Co., Inc. v. Northern Ins. Co. of New York, 224 Ill.2d 550, 866 N.E.2d 149 (2007). Subcontractor’s contract with general contractor contained Kotecki waiver. Subcontractor’s employee was injured, and GC filed third party complaint for contribution against it. Subcontractor tendered its defense in third party claim to both its worker’s compensation and employer’s liability carrier and its CGL carrier. The subcontract was not an “insured contract” under the exception to the employer’s liability exclusion contained in the CGL policy, because the subcontractor did not assume the general contractor’s tort liability by agreeing to waive its Kotecki cap. Therefore, the CGL carrier had no duty to defend the subcontractor in the third party claim. (“portion of the common liability above the Kotecki cap is not ‘imposed by law’ upon [the general contractor] but remains with [the subcontractor].”) 224 Ill.2d at 568, 866 N.E.2d 149. See also, American Family Mutual Ins. Co. v. Fisher Development, Inc., 391 Ill.App.3d 521, 909 N.E.2d 274 (2009).

Targeted Tenders in Illinois Targeted Tenders in Illinois Presentation Transcript

  • Doherty & Progar LLCYour partners in litigation.
    Illinois • Indiana •Wisconsin
  • “In the vast area of legal jurisprudence, there are undoubtedly many instances where being the first, or only, jurisdiction to grant rights to persons or entities may rightly be a source of pride.
    While it is still very early, the doctrine of ‘selective tender’ does not appear… to be one of those instances.”
  • Targeted Tenders in Illinois
  • “Our courts have chosen to protect the insured’s right to choose coverage for a claim with one insurer and knowingly forgo the coverage of another insurer…
    …despite the fact that ‘prejudice inescapably results’ from such a choice.”
  • Targeted Tenders in Illinois
    Activating a Tender
  • London Underwriters – 1992
    An insurance company’s knowledge of a claim does not constitute a “tender,” where the insured instructs the insurer not to participate in the lawsuit.
  • Cincinnati Companies – 1998
    • An insurer’s duty to defend is automatically triggered by actual knowledge of a claim.
    • If the claim has not been tendered by the insured, the insurer should then contact the insured to find out whether the insured wishes to have it assume the defense.
    • The insured may then accept the defense, or reject it (deactivate the tender).
    • If the insured rejects a defense by the insurer, the insurer is then relieved of its obligation to insured with regard to that claim.
  • Additional Insureds
    • If an insurance company has actual knowledge of a claim that has not been tendered by an additional insured, the insurance company should contact the additional insured to find out whether it wishes to have the insurer assume or participate in its defense.
    • If the additional insured instructs the insurer not to become involved in the lawsuit on its behalf, or if the insured is unresponsive or uncooperative, the is then relieved of its duty to defend with regard to that claim.
  • Actual Notice
    • Actual notice of a claim against an additional insured was provided when the insurance company’s own insured tendered its defense in a lawsuit in which the additional insured was also named…
    • …even though the additional insured did not tender its own defense to the insurance company
  • Bituminous Casualty – 1998
    • A general contractor is entitled to request exclusive coverage as an insured under its subcontractor’s insurance policy, and to knowingly forgo assistance from its own CGL carrier.
    • The general contractor’s CGL carrier was not obligated to contribute under its “other insurance clause,” since its policy was not triggered.
  • Who May Tender Defense
    • Coverage cannot be triggered by a tender from another insurance company.
    • Only the insured, or someone acting at the specific request of the insured, can properly tender and trigger a defense.
  • The Targeted Tender Rule
    The John Burns Construction Case
  • The Targeted Tender Rule
    • The “targeted tender rule” (also referred to as the “selective tender rule”), allows an insured that is covered by multiple concurrent policies of insurance the right to select which insurer or insurers will defend and indemnify it regarding a specific claim.
    • John Burns Construction Co. v. Indiana Insurance Co. (2000)
  • Targeted Tenders in Illinois
    Deactivating a Tender
  • Insured May Deactivate Targeted Tender…
    • An insured may “deactivate” coverage with an insurance company it had previously selected, and invoke exclusive coverage with another insurance carrier.
  • …Even After a Settlement…
    • In Richard Marker Associates, the insured itself settled the underlying lawsuit after both insurers denied its tender of defense.
    • After the declaratory judgment was resolved in the insured’s favor against one of the insurers, the insured withdrew its tender to the other insurer.
  • …and Notice May Be Given in the Settlement Agreement.
    • An insured’s statement in settlement agreement of its intention to deactivate coverage with a particular insurer may be sufficient even if manifested only in a settlement agreement.
  • Targeted Tenders
    Limits on Targeted Tenders
  • “Other Insurance” Provisions
    • Absent a policy provision limiting an insured’s right to select which insurer would be required to defend it, an “other insurance” provision does not in itself limit the insured’s right to tender its defense to one insurer alone.
    • That insurer is then foreclosed from seeking equitable contribution.
  • Horizontal Exhaustion of Coverage
    An insured must exhaust all available primary coverage before any excess insurance may be invoked.
  • Targeted Tender Rule Does Not Preempt Horizontal Exhaustion
    • Targeted tender may be applied to circumstances where concurrent primary coverage exists for additional insureds.
    • If defense and indemnity costs exceed the primary limits of the targeted insurer, the primary policies of deselected insurers must be exhausted before the insured may seek coverage under an excess policy.
  • Targeted Tenders
    Additional Insured Endorsements
  • Additional Insured EndorsementCG 2010 (1985 – 1993)
    “WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only respect to liability arising out of “your work” for that insured by or for you.”
  • Limit on Coverage
    Only limit on coverage is “arising out of,” which requires only “but for” causation.
    There is coverage if, but for the primary insured’s work, the additional insured would not be facing potential liability.
    “Your work” defined in policy, can include occurrences both while work is ongoing and completed operations.
  • General Contractor’s Liability
    Where employee of subcontractor/named insured is injured during project, even though only going to or from job site, general contractor’s liability arises out of subcontractor’s work, even though subcontractor was not negligent.
  • “Arising Out of Your Work”
    • No requirement of negligence on the part of named insured.
    • Named insured’s work only needs to be a cause leading to occurrence.
    • Therefore, even a summary judgment in favor of the named insured does not necessarily preclude coverage for the additional insured.
  • Negligence of Additional Insured
    Under the “arising out of” language, additional insured may be covered even though sole cause of occurrence was additional insured’s own negligence.
  • No Coverage Where No Allegation of Vicarious Liability
    Additional insured endorsement may exclude coverage for additional insured’s own negligence.
    Where complaint contains no allegations of vicarious liability based on general contractor’s retained control over operative details of subcontractor’s work, no coverage for general contractor.
  • Additional Insured EndorsementCG 2010 (1993 – 2004)
    “Who Is An Insured is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of “your work”your ongoing operations performed for that named insured….”
  • Limits on Coverage
    Nearly as broad as previous form because still uses “arising out of” language.
    Use of term “your ongoing operations” apparently eliminates coverage for completed operations.
  • Limits on Coverage
    Additional insured’s conduct may be contributing or concurrent cause, but there must be direct causal link to named insured’s “acts or omissions” to establish coverage for additional insured.
    Does not require that alleged act or omission of named insured be negligent.
    Even assigning employee to work in specific area could be enough to establish coverage.
  • General Contractor’s Negligence
    Where complaint alleged direct negligence on part of general contractor, without reference to liability based on acts or omissions of plaintiff’s employer, there was no coverage for general contractor as additional insured under employer’s policy.
    However, additional insured endorsement contained specific exclusion for liability resulting solely from acts or omissions of additional insured or its employees.
  • No Allegations of Vicarious Liability
    Complaint contained no allegations of vicarious liability based on retained control over operative details of subcontractor’s work.
    Additional insured endorsement excluded coverage for additional insured’s own negligence.
    Therefore, there was no potential coverage for the general contractor.
  • Coverage of Additional Insured Limited
    Under insurance policy at issue, coverage for additional insured was limited solely to liability of the additional insured resulting from conduct of the named insured.
  • Subcontractor Negligence Not Alleged
    Subcontractor’s employee brought lawsuit against general contractor.
    No coverage for general contractor as additional insured under subcontractor’s policy because negligence on part of subcontractor not alleged.
  • Additional Insured EndorsementCG 2010 (2004)
    “Section II – Who Is An Insured is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of your ongoing operations performed for that named insured for “bodily injury”, “property damage” or “personal and advertising injury” caused in whole or in part by:
    Your acts or omissions; or
    The acts or omissions of those acting on your behalf; in the performance of you ongoing operations for the additional insured(s) at the location(s) designated above.
  • Limits on Coverage
    Clarifies that no coverage for occurrence caused solely by negligence of additional insured.
    Additional insured covered if established, or complaint alleges, that occurrence caused wholly or partly by acts or omissions of named insured or those acting on its behalf.
  • Jury Verdict Scenarios
  • Unzicker
    Verdict for plaintiff $879,400
    Medical damages $91,400
    Non-medical damages $788,000
    Apportionment of liability:
    1% defendant
    99%third party defendant employer
  • Unzicker
    Defendant Pays:
    Joint and several liability for $91,400 in medical damages
    Several liability only for nonmedical damages, in amount of $7,880 (1% of $788,000)
    Third Party Defendant Pays Defendant:
    $90,486 (99% of medical damages)
  • Unzicker
    Plaintiff collects $99,280 from defendant (of total verdict of $879,400).
    Defendant collects $$90,486 from third party defendant.
  • After Amendment of Statute
    Plaintiff collects entire amount of judgment ($879,400) from defendant.
    Employer’s fault not considered in determining joint and several liability.
    Defendant could collect $870,606 from third party defendant, or up to amount of Kotecki cap.
  • Scenario 1
    Third: Assuming that 100% represents the total combined fault of all persons or entities who proximately caused the Plaintiff’s injury, we find the percentage of such fault attributable to each as follows:
    Plaintiff 0%
    Defendant 10%
    Third Party Defendant 90%
  • Scenario 2
    Third: Assuming that 100% represents the total combined fault of all persons or entities who proximately caused the Plaintiff’s injury, we find the percentage of such fault attributable to each as follows:
    Plaintiff 10%
    Defendant 1 20%
    Defendant 2 30%
    Third Party Defendant 40%
  • Summary
  • The insured may select a single concurrent insurance carrier to provide exclusive coverage for a loss.
  • An insured may elect to decline an insurer’s participation in a claim.
  • An insured may deactivate coverage with an insurer to whom a targeted tender was previously made, for the purpose of invoking exclusive coverage with another insurer.
  • All primary coverage must be exhausted before an insured may seek coverage under an excess policy. However, the insured may then make a selective tender of its indemnity to concurrent excess insurance carriers
  • Insurers may seek equitable contribution if an insured tenders its defense to multiple insurers that provide concurrent coverage for a loss.
  • An insurer to whom an insured has made a targeted tender has the duty to defend and indemnify with respect to the loss, and it may not seek equitable contribution.
  • An insurer that has been instructed by an insured not to involve itself in litigation is relieved of its obligations to the insured with respect to that loss.
  • An insurer may discharge its duty to defend simply by contacting an insured to ask whether the insured desires its assistance with respect to a particular claim.
  • An insured may deactivate a previous tender of its defense even after the underlying claim has been settled.
  • An insured may tender its defense to a different insurer even after the underlying claim has been settled.
  • Claims Considerations
  • Step 1
    Examine your policy:
    Is there an initial grant of coverage under an additional insured endorsement?
    Is there a written contract as required by any blanket additional insured endorsement?
  • Step 2
    Examine the complaint:
    Does the complaint allege liability on the part of the named insured (subcontractor)?
    Does the complaint allege liability of the tendering party (i.e. general contractor) based on retained control?
    Does the complaint allege negligence solely by the tendering party?
  • Step 3
    Examine the policy exclusions:
    Is coverage excluded for the sole negligence of the additional insured?
    Does the policy exclude coverage for liability of the general contractor based on retained control?
  • Other Considerations
    Briseno issues.
    Kotecki waivers.
    Is there an “insured contract?”
  • THE END
  • Doherty & Progar LLCYour partners in litigation.
    Illinois • Indiana •Wisconsin