Certified Question Asks Washington Supreme Court Whether Insurer is Bound by Contradictory Certificate of Insurance

Tred R. Eyerly | Insurance Law Hawaii | December 17, 2018

   The Ninth Circuit certified a question to the Washington  Supreme Court as follows:

Under Washington law, is an insurer bound by representations made by its authorized agent in a certificate of insurance with respect to a party’s status as an additional insured under a policy issued by the insurer, when the certificate includes language disclaiming its authority and ability to expand coverage?

T-Mobile USA Inc. v. Selective Ins. Co lf Am., 2018 U.S. App. LEXIS 31863 (9th Cir. Nov. 9, 2018). 

    In 2010, T-Mobile entered into a Field Services Agreement (FSA) with Innovative Engineering, Inc. under which Innovative would provide services in connection with the construction of rooftop cellular antennae towers in New York City. The FSA required Innovative to maintain general liability insurance naming T-Mobile as an additional insured, and required that Innovative provide T-Mobile with certificates of insurance documenting the coverage. Innovative obtained coverage from Selective Insurance Company of America. 

    The policy contained an Additional Insured (AI) Endorsement that extended “additional insured” status to any entity with whom Innovative entered into a written contract requiring Innovative to add that entity as an additional insured. In 2012, Selective’s authorized agent and insurance broker, the Van Dyke Group, Inc. (VDG) issued a Certificate of Insurance (COI) to T-Mobile. The COI stated that T-Mobile, as the certificate holder, “is included as an additional insured” under the Policy. But it also stated that the COI “is issued as a matter of information only and confers no rights upon the certificate holder,” “does not affirmatively or negatively amend, extend or alter the coverage afforded by” the Policy, and “does not constitute a contract between the issuing insurer ‘s authorized representative or producer and the certificate holder.” The COI further warned that “if the certificate holder is an Additional Insured, the policy must be endorsed.” This was apparently never done.

    In 2009, the owner of the building on which the cell towers were placed informed T-Mobile and Innovative of alleged property damage that resulted from Innovative’s earlier work on the rooftop. Innovative and T-Mobile tendered claims to Selective. In April 2013, the building owner sued T-Mobile and Innovative. 

    Selective agreed to defend Innovative, but denied the tender from T-Mobile because T-Mobile did not appear in the Selective policy named as an insured and did not qualify as an additional insured.

    T-Mobile filed suit and sought partial summary judgment, arguing that the 2012 COI issued by Selective’s authorized agent stated that T-Mobile was an additional insured. The district court denied T-Mobile’s motion and granted Selective’s cross-motion for summary judgment.

    On appeal, the Ninth Circuit noted there were two competing principles under Washington insurance law presented by the case. First, under Washington law, an insurer was bound by all acts of its agent which were within the scope of the agent’s real or apparent authority. Second, under Washington law, the purpose of issuing a COI was to inform the recipient that insurance had been obtained. 

    Washington law was therefore conflicted on whether Selective was bound by VDG’s representation in the 2012 COI that T-Mobile was an additional insured under the Policy. The Ninth Circuit concluded hat the proper course of action was to certify the issue to the Washington Supreme Court. 

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