The recent decision of the Court of Appeals of New York in Gilbane Building Co./TDX Constr. Corp. v. St. Paul Fire & Marine Ins. Co., -- N.E.3d --, 2018 WL 1473553 (N.Y. March 27, 2018), underscores that construction project owners and contractors must do their due diligence and carefully review insurance policy language to make certain that additional insured coverages will be extended in the manner intended by the parties to the project agreements. Given the volume, variety, and complexity of business contracts and insurance policies that can be required, the principles addressed in Gilbane should be carefully noted by participants in power generation, onshore and offshore oil and gas, renewable energy, heavy industry, infrastructure, and other large-scale construction projects.

THE BUSINESS CONTRACTS -

The Dormitory Authority of the State of New York (“Project Owner”) contracted with Samson Construction Company (“Contractor”) for the construction of a new forensic laboratory next to Bellevue Hospital. Project Owner entered into a separate contract with the construction manager for the project, a joint venture between Gilbane Building Company and TDX Construction Corporation (“Project Manager”). The contract between Project Owner and Contractor required that Contractor obtain general liability insurance for the job, with an endorsement naming Project Owner and Project Manager as additional insureds.