Unsigned Contract = No Proper Insurance Coverage

File this one under “Oops.” The unsigned contract meant that the contractual liability exclusion in the subcontractor’s insurance policy would control, since there was no obligation “assumed in a contract or agreement . . . [where the claim] occurs subsequent to the execution of the contract or agreement.”

And this was not just a matter of having an agreed contract form which the parties never got around to signing. The subcontract at issue stated that it “is not valid without the Subcontractor General Conditions Version 2012-003 signed and agreed to by all parties." There was no dispute that the parties had not signed the general conditions.

Thus, when the sub’s employee was injured, and filed suit against the property owner and prime contractor, the efforts of the owner and GC to pursue the sub’s insurance carrier were for naught. In the absence of a signed contract form, the sub’s carrier was entitled to disclaim coverage. Also, neither the owner nor the GC were “entities required by written contract to be included for coverage as additional insured's” [sic], since they could not prove a written contract.

The GC may want to reconsider its subcontract language. This case serves as a reminder to be diligent and thorough during procurement and administration of subcontracts, else there may be lapses not only in contract obligations but in insurance coverage. The case is Colony Ins. Co. v American Empire Surplus Lines Ins. Co., 2017 N.Y. Misc. LEXIS 1802 (May 10, 2017) (LEXIS subscription required).