Energy Insurance Mutual Ltd. v. Ace American Insurance Co.
In November 2004, an excavator punctured a high-pressured petroleum line owned by Kinder. Gasoline, released into the pipe trench, was ignited by welding activities. The resulting explosion and fire killed five employees and seriously injured four others. Cal/OSHA issued Kinder two “Serious Willful” citations due to the failure of its employees to mark the location of the petroleum pipeline before the excavation to install a water line. Wrongful death and personal injury lawsuits were filed against several defendants, including Kinder and Comforce, which supplied Kinder with temporary employees. Kinder sought coverage under its insurance policies, and also under Comforce‘s primary and umbrella policies with ACE. ACE agreed to participate in Kinder‘s defense under Comforce‘s primary policy, but under a reservation of rights. ACE declined coverage under Comforce‘s umbrella policy, based on a policy exclusion for “professional services.” The lawsuits against Kinder settled before trial. When Kinder’s policy limit was exhausted, its insurer sued ACE, seeking full reimbursement of the payments it made under its excess policy, alleging that Kinder was an additional insured under Comforce‘s umbrella policy and that the ACE umbrella policy was a first-level excess policy. The court of appeal affirmed summary judgment in favor of ACE finding the policy excluded the claims in the underlying lawsuits. View "Energy Insurance Mutual Ltd. v. Ace American Insurance Co." on Justia Law