Insurer Must Defend Additional Insured

    The federal district court found that the insurer owed a duty to defend the additional insured. Owners Ins. Co. v. Colliers Bennet & Kahnweiler, LLC, 2025 U.S. Dist. LEXIS 24893 (N.D. Ill. Feb. 11, 2025).

    Colliers Bennett Kahnweller, LLC (Colliers) managed property owned by North Shore Industrial Holdings LLC (North Shore). North Shore, by and through its agent Colliers, entered into a services contract with Ingram under which Ingram agreed to provide snow and ice management services at the property. This involved plowing and salting or parking lots. Under the terms of the services contract, Colliers had the ability to give direction to Ingram, terminate Ingram employees, and to terminate the agreement. Under the services agreement, Ingram was required to obtain commercial general liability insurance for Colliers. Ingram secured such a policy from Owners.

    Adam Chmielewski sued Colliers, alleging he sustained injuries from a slip and fall in 2016. He alleged that Colliers "managed, maintained and controlled" the property and had a "duty to exercise ordinary care and caution" in managing the property. 

    Owners defended Colliers for approximately four years in the Chmielewski litigation pursuant to a reservation of rights. Owners filed this coverage action seeking a declaratory judgment that it did not owe Colliers a duty to defend or indemnify in the underlying litigation. Owners argued Colliers was not an additional insured under the policy Ingram obtained. Owners and Colliers both filed motions for summary judgment.

    The policy identified an additional insured as "a person or organization [who], only with respect to liability arising out of 'your work' for that Additional Insured by or for you . . . if required in a written contract or agreement." Owners argued that Colliers was not covered by the policy because there was no contract between Colliers and Ingram for snow removal services. Therefore, Ingram did not perform work for Colliers. Colliers argued that Ingram provided snow removal services for it because the services agreement allowed Colliers to give direction to and terminate Ingram. 

    To determine the duty to defend, the court considered the allegations in the underlying complaint. Chmielewski alleged Colliers was responsible for managing, maintaining, and controlling the at- issue property. He further alleged that Colliers disregarded its duty to "exercise ordinary care and caution" in managing and keeping the property safe. These allegations demonstrated a possibility that Colliers' liability arose from Ingram's work for Colliers. Therefore, the policy and underlying complaint gave rise to a duty to defend, so long as that duty was not undermined by the services contract.

    Owners argued that Ingram contracted with Northshore through the service contract, and no contract existed between Ingram and Colliers. Therefore, Ingram could not perform work for Colliers and could not be an additional insured. The court held that even f Colliers was not a party to the services contract, this did not foreclose the possibility that Ingram nonetheless performed work for Colliers. The services contract did not eliminate the potential of coverage, even if it was read to make coverage less likely. Therefore, Colliers motion for summary judgment on the duty to defend was granted. 

    The court denied both motions on Owner's duty to indemnify because there were insufficient facts at this point to make such a determination.