METROPOLITAN TRANSPORTATION AUTHORITY v. ZURICH AMERICAN INSURANCE COMPANY (2009)

Judgment, Supreme Court, New York County (Richard F. Braun, J.), entered July 16, 2009, declaring that the coverage afforded plaintiffs under a $10 million umbrella policy issued by defendant regarding an underlying personal injury action was limited to $1 million in excess insurance, and that defendant was entitled to $500,000 on its counterclaim for the amount it paid to settle the underlying action, unanimously affirmed, with costs. Appeal from order, same court and Justice, entered May 29, 2009, to the extent it granted defendant's motion for summary judgment on its counterclaim, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Defendant excess insurer issued a follow-form policy, which incorporated the terms and conditions of an underlying $1 million general liability insurance policy to the extent not contradicted by the excess policy's express terms (see Vigilant Ins. Co. v. Bear Stearns Cos., Inc., 10 N.Y.3d 170, 177, 855 N.Y.S.2d 45, 884 N.E.2d 1044 [2008] ). Here, the underlying policy provided that additional insureds, such as plaintiffs, would be covered up to the lesser of the policy limits or the amount required by their trade contracts with the insured. There is no doubt that plaintiffs were additional insureds (Bovis Lend Lease LMB, Inc. v. Great Am. Ins. Co., 53 A.D.3d 140, 146-147, 855 N.Y.S.2d 459 [2008] ). Nor was there any conflict between the excess policy terms and the blanket additional insured rider in the underlying policy. As such, the trade contract limitation was incorporated into the excess policy (see id.).