Preprinted General Disclaimers Take Back Seat to Agent’s Statements
A project owner's parent corporation sued its contractor's liability insurer to obtain declaratory judgment and to recover for breach of contract, bad faith and violation of consumer fraud statutes based on the insurer’s failure to provide a defense in a building owner's suit alleging damages arising from a cell phone tower construction project. At issue was whether the insurer had to provide additional insured status to the parent when only its U.S. subsidiary qualified as an additional insured under the contractor’s commercial general liability policy. The case landed in the Washington Supreme Court on the certified question: where an insurer’s agent represents in an insurance certificate that a third party is an “additional insured” is the third party an insured despite failing to satisfy the policy’s additional insured endorsement and the certificate explicitly stating that it confers no policy rights upon the holder? The court held the agent's representations in the insurance certificate were binding on the insurer, and the agent's specific statement prevailed over the preprinted general disclaimers. The court was compelled to reconcile the insurance certificate that contained contradictory representations about the company’s additional insured status.