Insurance Coverage

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7^th Circuit Court of Appeals

Case Name: Cincinnati Insurance Company v. Vita Food Products Inc.

Case No: 15-1405

Officials: BAUER, POSNER, and KANNE, Circuit Judges.

Practice Area: Insurance Coverage

Existence of oral agreement to add company as additional insurance may require insurance company to provide coverage.

“Cincinnati Insurance argues that requiring the certificate before a liability-triggering event occurs is necessary to protect the insurer against fakery by the insured. After Ovando’s accident Painters would have been desperate for Vita to be acknowledged as an additional insured, as otherwise Vita, facing suit by Ovando and his wife, might try to drag Painters into the suit, accusing it of responsibility for the accident. The certificate was not issued by Painters or Vita, however, but instead, as we noted earlier, by an insurance agent on behalf of Cincinnati Insurance. The agent would not be willing to backdate a certificate of insurance at the insured’s (Painters’) request, so requiring that the certificate precede the accident would provide extra protection against fakery. Oral agreements are valid contracts, however, and the insurance policy is explicit that an oral agreement is sufficient to add an additional insured.”

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.