Anwar Oshana, an employee of JAK was seriously injured falling from a steel beam while on the job site controlled by FCL Buildings., Inc. (FCL). FCL had subcontracted the steel fabrication and erection at the job site to Suburban Ironworks, Inc. (Suburban). Suburban had then subcontracted the erection work to JAK.

Oshana filed suit against Suburban and FCL for their breach of duties in providing job site safety. Suburban and FCL then requested coverage from JAK’s CGL carrier, Westfield Insurance Company. Westfield denied FCL’s request because it did not qualify as an additional insured under JAK’s policy.

JAK had entered into a contract with Suburban that required it to provide Suburban and FCL with the same level of insurance that it would purchase for itself in the event of a mishap during the steel erection job. Accordingly, JAK purchased the CGL from Westfield that contained an additional insured endorsement that read:

“Section II-Who is an Insured is amended to include as an additional insured any person or organization for whom you are performing operations when you and such a person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured.”

Westfield filed for instant declaratory action that FCL was not an additional insured. During the cross-motions, Westfield argued that because no contract existed between JAK and FCL that FCL was not an additional insured. FCL argued that the wording in the Suburban/JAK contract specifically referred to FCL and thereby incorporated FCL into that contract. The circuit court agreed with Westfield. FCL then filed an appeal.

FCL arguments were dismissed because they were contrary to the wording in the endorsement. The court held that the endorsement required two conditions to an entity to be an additional insured.

• The named insured must be performing operations for such an entity
• The named insured and that entity must have an agreement whereby the entity is to be added as an additional insured.

FCL did not meet these conditions and therefore was not an additional insured under the JAK policy.

The circuit court decision was affirmed.

Westfield Insurance Company, Plaintiff-Appellee v. FCL Builders, Inc., Defendant-Appellant, No.1-10-0521, March 8, 2011, 407 Ill. App.3d 730,948 N.E.2d, 350 Ill. Dec 46