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(A version of this article appears in the California
Construction Law Reporter, published by the West Group.)
By James E. Acret
An
electrician employed by Sasco was injured when a pipe that
was undergoing pressure testing by the prime contractor
exploded. Neither Sasco nor the injured worker participated
in any way in the pressure testing. The subcontract provided
that subcontractor would provide insurance coverage to protect
contractor from claims that might arise out of or result
from subcontractor's operations. An endorsement to subcontractor's
liability policy provided coverage to the prime contractor
only with respect to liability arising out of subcontractor's
operations.
The
subcontract also required that to the fullest extent permitted
by law, subcontractor would indemnify contractor against
claims arising out of or resulting from the performance
of the work provided that the injury arose from any act
or omission of subcontractor even if contributed to by the
active negligence of the prime contractor.
The
worker sued the prime contractor, which sought indemnity
from Sasco and defense and indemnity from Sasco's insurer.
The insurer denied coverage and refused to defend. The trial
court awarded $113,383.05 to the prime contractor and its
insurer plus $27,780.48 in costs and attorney fees.
The
Court of Appeal reversed. St. Paul Fire and Marine Insurance
Company v. American Dynasty Surplus Lines Insurance Company,
101 Cal.App.4th 1038, 2002 DJDAR 10253 (2002). Contractor
contends that Sasco's act of showing up on the job and performing
work under the subcontract in and of itself is sufficient
to trigger the promise of indemnification. But Sasco undertook
no duty to indemnify except for a liability that arose from
an act or omission by the Sasco. Furthermore, there was
no potential for coverage under Sasco's liability policy.
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©2003 Howrey LLP
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