No Harm, No Foul, No Coverage

Failure to Name Additional Insured Caused No Damage

An additional insured, depending on the wording of an insurance policy, will have no coverage if sued for the additional insured’s negligence – only if the named insured negligence causes the additional insured to be sued.

In Donna L. Michel and George Scott Michel v. Sharon G. Langel, Conrow Construction Co., Inc., and New Jersey Manufacturers Insurance Company a/k/a NJM Insurance Group, and VNO Wayne Towne Center, LLC, and DSW Designer Shoe Warehouse, Docket No. A-4054-18T3, Superior Court Of New Jersey Appellate Division (May 8, 2020) the Appellate Division was asked to determine if the failure of a snow removal contractor to add the owner of a shopping mall to its commercial general liability policy caused the owner damages and whether the contractor had independent obligations to defend and indemnify the owner for claims arising from an accident causing personal injuries to a third party. On summary judgment, the trial court held that no damages resulted from the failure to name the owner as an additional insured party on the policy and the defense and indemnification obligations did not cover the owner’s negligence.


Donna Michel was walking across the parking lot of the Wayne Towne Center when she was struck by a car driven by Sharon Langel. At the time of the accident, there were piles of snow on medians at the end of rows of parking spaces in the parking lot. It was alleged that the piles of snow impeded Langel’s visibility as she made a left-hand turn just before her car struck Michel.

Michel and her husband sued Langel, VNO Wayne Towne Center, LLC (VNO), DSW Designer Shoe Warehouse (DSW), and Conrow Construction Co., Inc. (Conrow). VNO was the owner of the shopping center, DSW was the store Michel was walking in front of just before she was hit, and Conrow had a contract to plow the snow in the Wayne Towne Center parking lot.

VNO and DSW asserted cross-claims against Conrow. The scope of Conrow’s duties and responsibilities related to plowing the parking lot was governed by a services agreement with VNO (the Services Agreement). The Services Agreement described when Conrow was to plow snow and addressed Conrow’s duty to remove snow.

The Services Agreement also contained insurance provisions and an indemnification provision. Under the insurance provisions, Conrow was required to obtain and maintain various types of insurance, including commercial general liability coverage. In that regard, the Services Agreement provided that VNO was to be named as an additional insured on most of the insurance policies it was required to maintain.

Under the indemnity provision, Conrow agreed to defend and indemnify VNO from all claims and damages caused by Conrow, excluding any claim or damage caused by the “sole negligence” of VNO.

The policy obtained by Conrow excluded coverage for claims “arising out of the acts, omissions and/or negligence of the additional insureds. In October 2017, Michel and her husband settled their claims against Langel.

During discovery, a representative of Conrow testified at his deposition that the property manager instructed Conrow to locate the plowed snow in the same places as the prior contractor. The representative observed that the prior contractor had piled plowed snow in the median islands in front of the DSW store. Thus, Conrow asserted that the decision as to where to place the plowed snow was made by the property manager, who was controlled by VNO.

All parties participated in mandatory, non-binding arbitration. The arbitrator found that Michel’s injuries were caused by the negligence of Langel, VNO, DSW, and Conrow. The arbitrator then awarded Michel $450,000 in gross damages and allocated the liability among Michel and defendants: forty percent to Michel; thirty percent to Langel; fifteen percent to VNO and DSW; and fifteen percent to Conrow.

No party objected to that arbitration award and the award was incorporated into a judgment. Accordingly, the judgment awarded damages, including prejudgment interest, in the following amounts: NJM to pay $36,040.60; VNO and DSW to pay $70,633.55; and Conrow to pay $70,282.00.

The trial court found that Conrow had failed to name VNO as an additional insured. The trial court went on to reason, however, that that failure did not cause VNO any damages because the insurance policy excluded coverage for the negligence of the additional insured party. In other words, even if VNO had been properly named as an additional insured, it would not have been covered for its own negligence. In that regard, the court noted that nothing in the Services Agreement prevented Conrow from obtaining a policy excluding coverage for the negligence of the additional insured.


Conrow’s potential liability to VNO is governed by the obligations it undertook in the Services Agreement. There are two relevant obligations: insurance coverage and indemnification.

The plain language required that VNO be named as an additional insured under the commercial general liability policy obtained by Conrow. There is no dispute that VNO was not named as an additional insured. Thus, the question is whether VNO was damaged by that failure. The policy that Conrow obtained did not cover the additional insured for their own negligence. Consequently, VNO was not damaged by Conrow’s failure to name it as an additional insured because VNO’s liability was predicated on its own negligence.

Conrow also had independent obligations to defend and indemnify VNO. As previously summarized, however, those obligations were limited to defending and indemnifying for claims or damages arising out of Conrow’s “act[s]” or “omission[s].” The indemnification provision did not obligate Conrow to defend or indemnify VNO for its own negligence. Indeed, the indemnity provision in the Services Agreement excludes anything caused “by the sole negligence” of VNO.

Conrow breached none of its obligations with regard to the insurance coverage it obtained. Similarly, a plain reading of the indemnification provisions in the Services Agreement and Exhibit B again establishes that Conrow did not breach its obligations.

In both the insurance and the indemnification provisions in the Services Agreement, Conrow was protecting VNO from claims arising out of negligent or intentional actions by Conrow and its employees. Those provisions did not protect VNO from claims arising out of VNO’s own, independent, negligent acts. Consequently, the contract was consistent with most indemnification provisions, which generally do not protect the party being indemnified from its own negligence.

The trial court correctly denied summary judgment in favor of VNO and DSW.


The type of service agreement that Conrow signed required he name many people as additional insureds. The insurance he acquired only required him to make them additional insureds for liability they incurred as a result of the negligence of Conrow. Since the others – whether named as an additional insured or not – were found negligent in their own right and not by an error or omission of Conrow, the policies provided coverage only for Conrow and the indemnity agreement did not work because Conrow was not responsible for the suit. A classic case of no harm, no foul. If the mall owner wanted further protection it needed to require that the policy make them an additional insured for their own negligence.

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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