The Court of Appeals of New York has rejected “but for” causation interpretations of additional insured endorsements by other courts, holding that where a policy covers liability for injury “in whole or in part” by the named insured, a finding of proximate causation is required. Shook Partners David Schoenfeld and T.J. Dammrich explain the holding of Burlington Ins. Co. v. NYC Transit Authority in “Proximate Causation Required for Additional Insured Coverage,” for the ABA Section of Litigation – Insurance Coverage, July 20, 2017.
The Burlington case arose out of an injury to a New York City Transit Authority employee who was injured when the named insured’s excavating equipment touched a live electrical cable buried in concrete in the city subway. The named insured was operating the equipment properly, and the Transit Authority had not disclosed the location of the buried cable.
The insurance endorsement restricted liability to injury “’caused, in whole or in part,’ by the ‘acts or omissions’ of the named insured,” the authors write. The Transit Authority argued that it was entitled to coverage under a “but for” theory. However, according to the Court of Appeals, “causation cannot be partial, because an event either is or is not connected to a result,” and thus the phrase “in whole or in part” could only modify proximate causation. Moreover, the authors note, the court held that its interpretation “squares with ISO’s intent” when it amended the Form 20 10 Endorsement in 2004.