Cherilyn Zavatsky | Bloomberg Law Houston Cas. Co. v. St. Paul Fire & Marine Ins. Co., No. 10-1835, 2011 BL 306808 (4th Cir. Dec. 6, 2011) Insurance brokers at times may undertake non-traditional roles with respect to insureds. Brokers’ professional liability insurance is usually obtained to cover the broker’s liability for its activities, but brokers may also obtain commercial general liability (CGL) insurance. The Fourth Circuit recently held that bodily injury claims against an insurance broker that undertook responsibility for safety inspections at a South Carolina dam project, pursuant to an Owner-Controlled Insurance Program (OCIP), were excluded under an “Insurance and Related Work” endorsement to the CGL.
Broker as Safety Inspector
We won’t cover injury or damage or medical expenses for which the protected person may be held liable because of: any obligation assumed by any protected person in connection with an insurance contract or treat; [or]any failure to carry out, or improper carrying out of, any contractual or other duty or obligation in connection with an insurance contractor treaty. The Salazar matter settled for $20 million, with $5 million contributed by Houston Casualty and McGriff’s other insurers. Houston Casualty then filed suit against St. Paul, seeking reimbursement for defense and settlement costs. The district court granted summary judgment in favor of St. Paul and Houston Casualty appealed.
Inspection Duties Are “In Connection With” Insurance Contract
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