Millis Development & Construction, Inc. v. America First Lloyd's Insurance
809 F. Supp. 2d 616 | District Court, S.D. Texas | 2011
What This Case Means for Subcontractors
A general contractor (Millis) and home builder (Trendmaker) were sued for personal injury. An insurance dispute arose over whether Trendmaker qualified as an additional insured under the contractor's policy with America First Lloyd's. The court ruled that Trendmaker was indeed an additional insured based on written contract language between Millis and Trendmaker, even though Trendmaker had no direct contract with the insurance company. This matters because it shows that insurance protection can flow down through contract chains without requiring direct agreements between all parties.
Key Takeaways
- •Make sure your subcontracts explicitly require the general contractor to add you as an additional insured on their insurance policy—written language in your contract is what counts.
- •You don't need a direct contract with the insurance company to be covered; the general contractor's contract with you can trigger your additional insured status.
- •Insurance requirements should be clearly spelled out in your subcontract terms and flow-down clauses to avoid disputes later when claims arise.
A direct contract is not necessarily required by the plain language of the policy.
Frequently Asked Question
Do I need a direct contract with the insurance company to be an additional insured on a project?
No. This case confirms that you can qualify as an additional insured based on written language in your subcontract with the general contractor, even without a direct agreement with the insurance company. The key is making sure your subcontract clearly requires the GC to add you as an additional insured and specifies the insurance requirements.
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