Mutual Ben. Ins. Co., Aplt v. Politsopoulos

Summary

The Pennsylvania Supreme Court considered whether an employer’s liability exclusion in a commercial umbrella insurance policy barred coverage for claims against additional insured property owners by an employee of the named insured. The Court held that, where the policy uses both “the insured” and “any insured,” the employer’s liability exclusion is ambiguous as to whether it applies to an employee of an insured other than the insured seeking coverage, and the separation-of-insureds clause reinforces the narrower interpretation. The Court declined to extend the broad construction of “the insured” adopted in Pennsylvania Manufacturers’ Association Insurance Co. v. AETNA Casualty & Surety Insurance Co.

Holdings

1. The property owners were not named insureds because the policy did not identify them as named insureds on the declarations page or elsewhere; the Superior Court therefore erred in treating them as named insureds.
2. The employer's liability exclusion was ambiguous and applied only to claims asserted by an employee of the particular insured against whom the claim was directed. Because the property owners were not Denovitz's employers, the exclusion did not bar coverage for their claim.
3. A separation-of-insureds clause generally does not negate a clear exclusion, but in this policy it reinforced the interpretation that the ambiguous phrase 'the insured' referred to the particular insured against whom the claim was made.

Questions Presented

1. Whether the employer's liability exclusion in the umbrella commercial liability policy barred coverage for a negligence claim brought by an employee of the named insured against additional insured property owners who did not employ the injured person.
2. Whether the policy's separation-of-insureds clause altered or reinforced the interpretation of the employer's liability exclusion.
3. Whether the Superior Court properly treated the property owners as named insureds under the policy.

Disposition

affirmed