In Factory Mut. Ins. Co. v. Skanska United States Bldg., No. 18-cv-11700-DLC, 2020 U.S. Dist. LEXIS 95403 (Skanska), the United States District Court for the District of Massachusetts considered whether contractors on a construction job were additional insureds on the developer’s builder’s risk insurance policy. After a water loss occurred during construction, the builder’s risk insurance carrier paid its named insured for the resultant damage, and subsequently filed a subrogation action against two contractors. The defendants filed a motion for summary judgment, claiming that the anti-subrogation rule barred the carrier from subrogating against them because they were additional insureds on the policy. The court found that based on the particular language of the additional insured provision in the policy, the defendants were not additional insureds for purposes of the subrogation action.
Skanska arose from property damage that occurred during a construction project where Novartis Corporation (Novartis) endeavored to construct a biomedical research building in Cambridge, Massachusetts and retained Skanska USA Building, Inc. (Skanska) as the general contractor. In turn, Skanksa hired J.C. Cannistraro, LLC (JCC) as a subcontractor. Novartis secured a builder’s risk insurance policy from Factory Mutual Insurance Company (Factory Mutual). The policy defined “Insured” as Novartis and its subsidiaries, partnerships and joint ventures that it controlled or owned. The policy included another provision, titled “Property Damage,” which stated that the policy “insures the interest of contractors and subcontractors in insured property… to the extent of the Insured’s legal liability for insured physical loss or damage to such property.”