Partner Christopher Love received a favorable decision from the Washington State Supreme Court on behalf of his client in a wrongful death suit. The case is Preferred Contractors Insurance Company v. Baker and Son Construction, Inc. et al. Chris represented Angela Cox, a widow of a construction worker killed on a jobsite by the alleged negligence of a contractor. The contractor had purchased liability insurance as required by the Washington Contractor Registration Act to register and work as a contractor in the State of Washington. However, the contractor’s insurer filed a countersuit against both Ms. Cox and the contractor it insured claiming there was no coverage because the insurance policies required the injury to happen and the resulting legal claims for damages to be made within the same 12-month period.
Chris argued that the insurance policy’s coverage restrictions violate Washington public policy intended to protect members of the public injured by contractors by ensuring compensation is available for their injuries.
The Washington State Supreme Court concluded that the legislature created public policy (through RCW 18.27.050 and RCW 18.27.140) where contractors must be financially responsible injuries caused due to their negligence. Based on this, the court found that a policy requiring a loss to be incurred and a claim to be filed in the same policy year fails to provide prospective or retroactive coverage and is unenforceable.
This decision prohibits insurers from selling commercial general liability policies to contractors that combine these two coverage restrictions or otherwise provide unrealistically narrow, “illusory” coverage. It preserves the social safety net the Washington State legislature intended by creating the Contractor Registration Act’s insurance requirements, protects the public by ensuring compensation is available when they are injured by a contractor’s negligence, and protects law-abiding contractors complying with the act’s insurance requirements by ensuring the coverage for which they have paid is in effect.
Ultimately, the decision may impose public policy limits on the types of coverage restrictions or exclusions insurers can include in liability policies issued in any industry for which Washington law requires insurance.