NO PROTECTION VIA ADDITIONAL INSUREDS ENDORSEMENT

An endorsement broadening the basic protection of a Comprehensive General Liability policy carried by a chain of stores included Employees as Additional Insureds coverage, providing as follows:

“The ‘Persons Insured’ provision is amended to include any employee of the named insured while acting within the scope of his duties as such but the insurance afforded to such employee does not apply …to bodily injury or personal injury as described in the Personal Injury Liability section of this endorsement to…another employee of the named insured arising out of or in the course of his employment…”

When an employee, injured in an accident, brought suit against two fellow employees for causing his injuries, the insurer denied liability but the trial judge ruled in favor of the injured man, stating that the policy was clearly intended to cover such an occurrence. The insurer appealed.

The injured party argued that the policy was ambiguous, that a reading of the quoted endorsement extended coverage to the two employees for bodily injury and applied the exclusion only to the “personal injury” insurance that was added.

The Alabama Supreme Court disagreed. It said that the clause at issue could not be more explicit, that it clearly stated that insurance afforded to employees “does not apply to injury from another employee arising out of and in the course of his employment.” The court reversed the trial court judgment and ruled that the insurer was not obligated to defend the two employees as additional insureds.

Commercial Union Insurance V. Rose’s Stores, Incorporated, Et Al. Alabama Supreme Court, October Term, 1981-1982. No. 80-657. March 19, 1982. Reversed. CCH 1982 Fire and Casualty Cases 1241.