The Case of The Vanishing Additional Insured
I've been involved lately in a case that frankly has me stumped.
Here's the problem:
1. The policy contains an "Additional Insured Required By Written Contract" endorsement.
2. Prior to the issuance of the policy was issued, the Named Insured had contracted with ACE Corporation that had various subsidiaries.
3. After the policy was issued (but before the accident occurred), ACE Corporation sold the former subsidiary.
4. Suit has now been filed against the former subsidiary, which is seeking as an additonal insured, claiming the loss arose out of the work performed on its behalf by the named insured.
Under these circumstances, has the subsidiary lost the right that it possessed as of the date the policy was issued? In other words, where a party gains AI status through a blanket endorsement of this sort, do the rights vests for the entire policy period or can the claimant lose its coverage rights through events that, had they existed at the outset of coverage, would have eliminated any right to coverage.
This is one of those legal issues where the answer seems clear but I'm darned if I can find a case on one side or the other. If you have case law or thoughts on the issue, please contact me at maylward@morrisonmahoney.com
Thanks all.
