Insurer off hook in fatal fall from roof

An insurer would normally have been obligated to defend a company that was an additional insured under its coverage, but is off the hook in a case involving a worker who fell to his death from a roof because of the settlement in the underlying litigation, a federal appeals court said, in a divided ruling.

An Illinois warehouse operator contracted with a Tennessee roofing company to repair its hail-damaged roofs, according to Friday’s ruling by the 7th U.S. Circuit Court of Appeals in Chicago in United Fire & Casualty Co. vs. Prate Roofing & Installations, LLC.

Because it did not hold an Illinois license, the roofing company, Hendersonville, Tennessee-based All Seasons Roofing Inc., arranged for Wauconda, Illinois-based Prate Roofing & Installations LLC to serve as general contractor, with All Seasons serving as subcontractor, the ruling said.

A commercial general policy issued by Cedar Rapids, Iowa-based United fire listed Prate Roofing as an additional insured, according to the ruling.

In November 2016, a worker who was repairing a roof on one of the warehouses was killed when he fell backward through an unprotected skylight.

After workers compensation provided limited death benefits, the worker’s family filed a wrongful death suit against defendants including Prate and All Seasons. United Fire refused to defend Prate in the litigation and it was defended instead by its own insurer, Nationwide Mutual Insurance Co.

A settlement was reached between All Seasons and United Fire in the worker’s death, with the insurer paying the policy limit of $1 million. The settlement released All Seasons from liability in the case. The family’s case remains pending against Prate Roofing.

Meanwhile, United Fire filed suit separately seeking a declaration it had no duty to defend Prate in the case. The U.S. District Court in Chicago concluded that, because the underlying complaint may result in vicarious liability for Prate Roofing as an additional insured, United Fire had a duty to defend the company.

The appeals court’s 2-1 majority ruling agreed with the lower court that United Fire’s coverage potentially triggered the duty to defend.

However, it added that United Fire owed a duty to defend Prate roofing only for potential vicarious liability, “i.e., only if All Season’s potential liability might have been imparted to it.

“But under the terms of the settlement, All Seasons had no liability,” the ruling said. As a result, United Fire has no duty to defend Prate for vicarious liability, the majority opinion said, in modifying the lower court’s ruling.

The dissenting opinion said Prate Roofing should not be held potentially vicariously liable for All Season’s torts.

Attorneys in the case did not respond to requests for comment.

In May, the Occupational Safety and Health Administration has cited a roofing contractor in the death of a 16-year-old boy who fell while working at a Nashville, Tennessee, hotel site.

This article was first published in Business Insurance.

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