Court Decision on Insurance Coverage for Crane Inspection Firm
A recent decision by a federal court has determined that Associated Industries Insurance Company, owned by Amtrust, is not obligated to provide a defense or indemnification for a Pennsylvania crane inspection company involved in two personal injury lawsuits. The court found that the claims are excluded under the professional services provision in the company’s liability policy.
The ruling was issued by Judge Cynthia M. Rufe of the US District Court for the Eastern District of Pennsylvania and relates to an incident that occurred on March 5, 2022. At a high-rise construction site in Philadelphia, a crane’s rigging system detached and fell from an upper level at One Dock Street, injuring two workers, Joshua Rastelli and Kevin Flanagan, who subsequently filed lawsuits in the Philadelphia County Court of Common Pleas.
The lawsuits named Atlantic Crane Inspection Services Inc. among the defendants. According to the complaints, Atlantic Crane had conducted inspections and related services for the crane and its components prior to the accident. The plaintiffs claim the company failed to identify hazards or recommend corrective actions that might have prevented the incident.
Atlantic Crane sought coverage under a commercial general liability policy from Associated Industries, which typically includes standard bodily injury coverage. However, the insurer pursued a declaratory judgment in federal court, arguing that the policy’s endorsements excluded these claims from coverage.
The court sided with the insurer. Judge Rufe ruled that the Engineers, Architects or Surveyors Professional Liability Exclusion clearly applied. This clause excludes coverage for “bodily injury,” “property damage,” or “personal and advertising injury” arising from “professional services,” with “inspection” and “supervisory” activities specifically included.
“The Underlying Complaint alleges that Atlantic Crane performed services covered by the Engineer Exclusion’s definition of ‘Professional Services,’” Judge Rufe stated. The plaintiffs’ allegations focused entirely on Atlantic Crane’s inspection duties, including its alleged oversight in ensuring the crane’s safety and addressing deficiencies. As all liability claims in the underlying complaints were based on these services, the exclusion was deemed fully applicable.
Atlantic Crane contended it was not acting as an engineer, architect, or surveyor, and thus the exclusions should not apply. However, the court dismissed this argument, emphasizing that the exclusion pertains to the nature of the services provided, rather than the titles or designations of the service providers.
Judge Rufe also noted a broader exclusion—the Designated Professional Services Exclusion—which removes coverage for “all professional services.” Nevertheless, since the Engineer Exclusion was conclusively applicable, a separate analysis of the broader exclusion was unnecessary.
The court denied Atlantic Crane’s motion for judgment on the pleadings and approved the insurer’s cross-motion, declaring that Associated Industries is not required to defend or indemnify Atlantic Crane in the ongoing state court lawsuits.
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