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Win for contractors in certificate-of-insurance case

AGC of Washington recently gave amicus support to a business seeking insurance coverage based on the representations in a certificate of insurance (“COI”).  The Washington Supreme Court issued its decision in the case, T-Mobile USA Inc. v. Selective Insurance Company of America, on October 10, 2019.  The case arose out of the construction of a cell phone tower for a company called T-Mobile Northeast LLC (“T-Mobile NE”).  T-Mobile NE was a subsidiary of T-Mobile USA, Inc. 

T-Mobile NE hired a contractor who agreed to name it as an additional insured on the contractor’s policy.  The contractor was insured by Selective Service, whose agent issued a COI that the contractor passed on to T-Mobile NE.  The COI stated that both T-Mobile NE and T-Mobile USA were additional insureds under the Selective policy.  The terms of the policy, however, stated that because the contractor had a written agreement only with T-Mobile NE, only T-Mobile NE was an additional insured. 

The owner of the building housing the cell phone tower sued T-Mobile USA, which tendered the claim to Selective.  Selective denied coverage, and T-Mobile USA sued.  The Washington Supreme Court ruled that because the agent who drafted the COI was acting on behalf of Selective, the insurer was bound by the agent’s representation on the COI that T-Mobile USA was an additional insured, even if the policy contradicted that.  In so ruling, the Court refused to give effect to disclaimers on the COI—boilerplate on most certificates issued to contractors—that the certificate was “issued as a matter of information only” and did not “amend, extend or alter the coverage afforded by the” policy.  As the Court explained, it could not give effect to these general disclaimers over the COI’s more specific representation (i.e., that T-Mobile USA was an additional insured) because doing so “would render issuance of the certificate . . . pointless,” and the COI “would have no informational value at all.” 

The case is a victory for contractors (and all other parties to construction contracts) in that it allows them to rely on the representations in COIs—without having to get copies of actual insurance policies to confirm that the representations are accurate. 

The AGC amicus brief was drafted by Franklin Cordell, Greg Pendleton, and Todd Hayes, who is a member of the AGC Legal Affairs Committee.  If you have any questions about the decision, please contact Todd at Harper│Hayes PLLC or Michele Willms with AGC of Washington.

— Todd Hayes, Harper Hayes PLLC

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