Aig Commerical Insurance

10-1096 - Wright-Ryan Construction, Inc. v. AIG Commercial ...

This appeal requires us to determine which of two commercial general liability (CGL) insurance policies should be considered “primary” for coverage of a claim arising from an accident at a construction site in Portland, Maine. At the time of the subject claim, Wright–Ryan Construction, Inc. (Wright–Ryan) was insured under its own CGL insurance policy, issued by Acadia Insurance Company (Acadia), and appeared as an “Additional Insured” on a subcontractor's CGL policy, issued by AIG Commercial Insurance of Canada (AIG). Wright–Ryan and Acadia filed a complaint for a declaratory judgment that AIG was obligated to defend Wright–Ryan and for compensation of costs incurred by Acadia in Wright–Ryan's defense. On cross-motions for summary judgment, the district court granted judgment in AIG's favor, holding that Acadia's CGL policy provided primary coverage for the accident claim, with the AIG policy affording solely excess coverage.

Appealing from this grant of summary judgment, Wright–Ryan and Acadia contend that the district court erred as a matter of law in its interpretation of the “Other Insurance” clauses of the two CGL policies, which govern priority of coverage between overlapping insurance policies. According to plaintiffs, a proper reading of these “Other Insurance” clauses dictates that the AIG policy be deemed primary. We agree and therefore reverse.

I.

The salient details of this insurance dispute are uncontested. Wright–Ryan, a Maine construction company, was hired by the University of Southern Maine as the general contractor for the construction of a building known as University Commons. Wright–Ryan in turn subcontracted with the Canadian company Norgate Metal, Inc. (Norgate) for the fabrication and erection of structural steel for the project. Although Wright–Ryan had its own CGL insurance policy, Wright–Ryan required Norgate, as a condition of the subcontract, to obtain CGL insurance for the University Commons project in the amount of $2 million and name Wright–Ryan as an additional insured on the policy. Norgate procured the requisite coverage through AIG, which issued a certificate of liability insurance to Wright–Ryan and the University of Southern Maine naming them “Additional Insureds” to Norgate's policy, providing insurance coverage on a primary and non-contributory basis for all liability “arising out of [Norgate's] premises or operations.

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