Additional Insured Under One Coverage Part Is Not Additional Insured Under Another Coverage Part

The Supreme Court of Rhode Island has held that an insurer had no duty to defend or indemnify a contractor of its insured because the contractor was not an additional insured under the professional liability coverage part of the insured’s policy, even though the contractor was an additional insured under the general liability coverage part of the same policy.  Quest Diagnostics, LLC v. Pinnacle Consortium of Higher Educ., 2014 WL 2917036 (R.I. June 27, 2014)

An insured university entered into a professional services agreement (PSA) with an independent contractor, making the contractor responsible for performing certain clinical laboratory testing for students and employees at the university’s health center.  The PSA required both parties to procure four types of insurance coverage, including general liability insurance and professional liability insurance.  The agreement obligated the parties to name each other as an additional insured under their general liability policies; however, there was no contractual requirement that the parties do so for the professional liability policies.  The university obtained general liability coverage and professional liability coverage under one policy issued by the same insurance company.

In 2006, a student at the university sued the university and the contractor for failing to exercise the “degree and skill expected of a reasonably competent provider of laboratory services” in failing to process a strep test and provide the results in a timely manner.  The student settled her claims with the university and its primary and excess insurers, but the contactor did not participate in the settlement.  Shortly after the settlement, the contractor demanded a complete defense and indemnification from the university’s primary insurer.  When the contractor did not receive a response, it filed a declaratory judgment action against the university’s primary and excess insurers.  The trial court granted the insurers’ motion for summary judgment.

On appeal, the contractor argued that it was an insured under the university’s primary and excess policies, including the general liability and professional liability coverage parts.

The appellate court analyzed the policy’s additional insured provision, which defined an additional insured as “any person, corporation, company, organization, estate or entity but only to the extent the [university] has agreed to do so.”  The court determined that, because the PSA was the basis of the agreement to extend coverage to the contractor as an additional insured, the policy and the PSA must be construed together.  The court concluded that the PSA was “clear and unambiguous in requiring the contractor and university to name one another as additional insureds only under their respective general liability insurance coverage”—and not under the professional liability coverage.

The court also rejected the contractor’s argument that, because it was an additional insured under the general liability coverage part of the policy, it was an additional insured under all coverage parts of the policy, including the professional liability coverage part.  The court determined that, because there was no requirement in the PSA that the university provide professional liability coverage to the insured, the contractor was not an additional insured under the professional liability coverage part.


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