December 28, 2015

The Seventh Circuit for the United States Court of Appeals handed down a decision in favor of Chicago-based Vita Food Products Inc. that recognized the interests of additional insureds. In Cincinnati Insurance Company v. Vita Foods Products, Inc., the Seventh Circuit held in a decision penned by Judge Richard Posner that Vita could still be an additional insured notwithstanding an insurance policy’s requirement that a certificate of insurance be issued before the occurrence of the accident that triggered the claim. Vita was represented by Much Shelist.  

Much Shelist Principal Steven P. Blonder, lead counsel for Vita, argued there was no explicit provision in the policy requiring that a Certificate of Insurance be issued prior to an accident, and that the reference in the policy to the Certificate was ambiguous. He also argued that, by its terms, the certificate conveyed no rights and could not affect whether or not coverage was available. Principal Joanne Sarasin and Associate Marissa Downs were also members of the legal team.  

The court agreed with Vita’s arguments and reversed a federal judge’s decision granting summary judgment to Cincinnati.     

“We’re very pleased with this decision. Vita did nothing wrong, and its rights have been vindicated,” said Blonder. “Insurance companies are taking increasingly tough positions against claims by additional insureds, but in this case the court reached the right result.”    

The case is significant in that it arises out of an accident at Vita’s facility that left a painting contractor in a coma. Vita retained Painters USA, Inc. in 2011 to paint the facility, and turned over the entire facility to the contractor. The policy provided that any party the contractor agreed, in writing or orally, to make an Additional Insured would be designated as such provided the agreement was entered into before any accident to which the insurance would apply. But the policy also required that a Certificate of Insurance be issued as evidence of the Additional Insured’s status.  

In this case, there was a catastrophic accident, but the agreement between the contractor and Vita had been entered orally prior to the accident, although the certificate of insurance was not issued until after the accident. Cincinnati denied coverage, arguing that the Certificate had not been issued prior to the accident.