A recent New York appellate decision clarifies when property owners can – and can’t – claim additional insured status under a contractor’s commercial liability policy.
On October 14, 2025, the Appellate Division, First Department, issued its decision in 600 Associates LLC et al. v Illinois Union Insurance Company, a case that examined whether property owners and developers could claim coverage as additional insureds under a commercial liability policy issued for a Bronx construction project.
The dispute began when 600 Associates LLC, 600 East 156th Street Housing Development Fund Corporation, and 600 East 156th Street LIHTC, LLC – collectively the owners of 600 East 156th Street – contracted Mega Contracting Group, LLC to perform construction work. Mega, in turn, subcontracted with Allen Blvd Interiors, which then subcontracted part of its work to Len & Mar Drywall Corp. Len & Mar held an insurance policy with Illinois Union Insurance Company.
The property owners and Mega Contracting Group (collectively referred to as “Plaintiffs” in the decision) initiated a third-party action against Illinois Union Insurance Company. They sought a declaration that Illinois Union was required to defend and indemnify them as additional insureds under the policy issued to Len & Mar. Their claim was based on the belief that, as owners and contractors involved in the project, they were entitled to coverage.
However, the agreement between Allen Blvd Interiors and Len & Mar specified that Len & Mar would defend, indemnify, and procure insurance in favor of the “owner/contractor,” defined in that contract as Allen Blvd Interiors. The agreement did not reference the plaintiffs. The policy issued by Illinois Union to Len & Mar included an additional insured endorsement, which stated: “Any person(s) or organization(s) for whom you are performing operations is also an additional insured, if you and such person(s) or organization(s) have agreed in writing in a contract or agreement that such person(s) or organization(s) be included as an additional insured on your policy…”
Illinois Union moved for summary judgment, arguing that the plaintiffs were not additional insureds because there was no written agreement between them and Len & Mar, as required by the policy’s endorsement. The Supreme Court initially denied this motion, but the Appellate Division reversed that decision. The appellate court granted summary judgment in favor of Illinois Union Insurance Company, declaring that the plaintiffs were not named insureds or additional insureds under the policy and were not entitled to a defense or indemnity from Illinois Union in the underlying action.
The decision underscores the importance of direct written agreements in securing additional insured status under commercial insurance policies. Without such an agreement between the insured and the party seeking coverage, even those involved in a construction project may not be entitled to protection under another party’s policy.
For insurance professionals, this case highlights the need for careful contract review and attention to policy language. The court’s decision was based strictly on the absence of a written agreement between the plaintiffs and Len & Mar, as required by the policy’s additional insured endorsement. This outcome serves as a reminder that, in insurance coverage disputes, the specific terms of both the contract and the policy will determine who is covered – and who is not.
