[J-85-2014] IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, MCCAFFER Y, STEVENS, JJ.

MUTUAL BENEFIT INSURANCE COMPANY, Appellant

v.

CHRISTOS POLITSOPOULOS, DIONYSIOS MIHALOPOULOS AND MARINA DENOVITZ,

Appellees : : : : : : : : : : : : : No. 60 MAP 2014 Appeal from the Order of the Superior Court dated 9/6/13, reconsideration denied 11/6/13, at No. 421 MDA 2012 which reversed/remanded the order of the Lancaster County Court of Common Pleas, Civil Division, dated 2/2/12 at No. CI-10-02578

ARGUED: October 7, 2014

OPINION

MR. CHIEF JUSTICE SAYLOR DECIDED: May 26, 2015

This appeal concerns the scope of an employer’s liability exclusion in an umbrella commercial liability insurance policy.

Leola Restaurant maintained an umbrella commercial li ability insurance policy with Appellant, Mutual Benefit Insurance Company, whi ch contained an employer’s liability exclusion. This exclusion prescribed, inter al ia, that the policy did not provide coverage pertaining to liability for injury to “[a]n ‘employee’ of the insured arising out of and in the course of . . . [e]mployment by the insure d[.]” Complaint, Ex. C, Employer’s Liability Exclusion. In addition, the policy contained a clause captioned “Separation of Insureds,” which provided, subject to exceptions not rel evant here, that “this insurance[J-85-2014] - 2

applies . . . [s]eparately to each insured against whom claim is made or suit is brought.” Id. at Ex. C, §V ¶14(b) (emphasis in original). Leola Restaurant conducted its business on a property lease d from Appellees Christos Politsopoulos and Dionysios Mihalopoulos (the “Property Owners”). The lease required the Property Owners to be “named as . . . ad ditional insured parties” on the liability policy. Id. at Ex. E, ¶1(d). While the Property Owners were not specifically designated on the declarations page of the umbrella po licy, the instrument was designed to extend coverage to unidentified persons doi ng business with Leola Restaurant for whom the latter had agreed in writing to provide insurance. See id. at Ex. C, §III ¶2(f). In December 2007, during the policy period, Appellee Marina Denovitz, an employee of Leola Restaurant, fell from an outside set of stairs and suffered injuries. She commenced a negligence action against the Property O wners in the common pleas court, asserting that they were negligent in maintaini ng the stairs in an unsafe and dangerous condition. The Property Owners sought defense and indemnification from Appellant, per the umbrella policy. 1 Appellant acknowledged that the Property Owners were insureds under the umbrella policy but nevertheless disclaimed cov erage, invoking the employer’s liability exclusion. Based on the policy’s bro ad definition of “insured” to encompass named insureds to include Leola Restaurant, Comp laint, Ex. C, §III ¶1, it was Appellant’s central position that Ms. Denovitz was a n employee of “the insured,” for purposes of the exclusion (albeit she was not an employ ee of the Property Owners, i.e., the insureds against whom a claim had been asserted). T he Property Owners, on the

1 Additionally, the Property Owners claimed to have th e status of insureds under a separate business owners policy issued by Appellant. The present appeal, however, concerns only the umbrella policy.[J-85-2014] - 3

other hand, took the position that the exclusion was uncl ear, and coverage should be deemed to be negated only upon injury to an employe e of the specific insured seeking coverage. In particular, the Property Owners pointed to the separation-of-insureds clause providing that coverage extends separately to e ach insured against whom claims

are asserted. Appellant commenced a declaratory judgment action in a n effort to vindicate its position that the exclusion pertained. Summary judgme nt was awarded in Appellant’s favor, with the common pleas court -- per the Honorab le Jeffrey D. Wright -- explaining that it was bound by precedent with which it did not a gree, in particular, Pennsylvania

Manufacturers’ Association Insurance Co. v. AETNA Casual ty & Surety Insurance Co., 426 Pa. 453, 233 A.2d 548 (1967) [hereinafter, “PMA ”]. The common pleas court explained that PMA’s holding ref lected that the term “the insured,” as it appears in an employer’s exclusion a ppearing in a liability policy, 2 encompasses the named insured, regardless of whether covera ge was sought by a different insured. Thus, the court reasoned, the exclu sion prevented coverage from extending to redress harm to Ms. Denovitz, since she was a n employee of the named insured (Leola Restaurant), and her injuries were occasio ned in the course of such employment, even though suit was brought against addi tional insureds, i.e., the Property Owners. The common pleas court also observed that the PMA Court rejected the argument that a severability-of-interests clause -- which provided that “the term ‘the insured’ is used severally and not collectively,” represe nting an analogue to the separation-of-insureds provision presently in issue -- ap plied in a way that would

2 The particular policy at issue in PMA was a motor vehicl e liability policy.[J-85-2014] - 4

undermine a broad application of the employer’s liabi lity exclusion relative to claims asserted by employees of a named insured. See id., 23 3 A.2d at 551. In the common pleas court’s view, however, absent the PMA overlay, the policy language used in both PMA and in the present case shoul d be deemed ambiguous.

The court continued to summarize several decisions of the Superior Court which, it believed, were consistent with such view and reflected a more apt treatment of insurance law. See, e.g., Maravich v. Aetna Life & Ca s. Co., 350 Pa. Super. 392, 408- 11, 504 A.2d 896, 905-06 (1986) (holding that a fir e insurance policy exclusion eliminating coverage for losses deriving from “neglect o f the insured . . . to save and preserve property” applied only to defeat coverage re lative to a neglectful insured and not any or all insureds (emphasis added)); McAllister v. Millville Mut. Ins. Co., 433 Pa. Super. 330, 338-41, 640 A.2d 1283, 1287-89 (1994) ( distinguishing Maravich on the basis that the exclusionary terms in the policy at issue in McAllister applied by their terms more broadly to neglect by “an insured” or “any insured”). Had it been free to discount PMA, the common pleas cour t explained, it would have implemented the following legal analysis center ed upon the use of a definite article in conjunction with the term “insured” in the umbrell a policy’s employer’s liability

exclusion:

The use of the phrase “the” insured rather than “any” insured

or “an” insured, particularly in a policy which contains a severability of interests clause, demonstrates that the interests of the different insureds were intended to b e several rather than joint. In other words, the policy , as written by Mutual Benefit, provides for coverage to [ the Property Owners] separate and independent from that t o [Leola Restaurant]. Since Denovitz was not an employe e of “the” insured Owners, the Employers’ Liability Exclusio n should not be applied to preclude coverage to [the Pro perty Owners] under the Umbrella Policy. At the very least, the use of “the” insured rather than “the named insured” o r “any[J-85-2014] - 5 insured” makes the term ambiguous, and thus necessarily interpreted against [Appellant], as the insurer. Mut. Benefit Ins. Co. v. Politopoulos, No. CI-10-0257 8, slip op. at 9 (C.P. Lancaster Feb. 2, 2012) (emphasis in original). Notwithstanding this analysis and its point of view that PMA was “flawed and outdated,” id. at 10, the common pleas court considered itself bound by the decision. Accordingly, as noted, summary judgment was awarded in A ppellant’s favor. On appeal, the Superior Court reversed in a published decision. See Mut. Benefit Ins. Co. v. Politopoulos, 75 A.3d 528 (Pa. Su per. 2013). In the opinion, initially, PMA was distinguished on the basis that the insureds seeking coverage in that case were not named insureds, whereas, according to the inter mediate court, in the present case “the [Property] Owners undisputedly were named ins ureds under the Umbrella Policy.” Id. at 535. 3 The court then transitioned to a distinct proviso in t he separationof-insureds clause addressing named insureds and providing (subject to limited exceptions not applicable here): “[T]his insurance appl ies . . . [a]s if each named insured were the only named insured[.]” Complaint, E x. C, §V ¶14(a) (emphasis in original). Based on the unsupported pronouncement th at the Property Owners were named insureds, see supra note 3, and the effect of the above language, the Superior

Court reasoned that:

[w]hen determining coverage as to any one insured, the policy must be applied as though there were only one

3 The Superior Court provided no explanation for why it viewed the Property Owners as named insureds, when their names do not appear on the declarations page of the umbrella policy. Parenthetically, as noted, the lease between Leola Restaurant and the Property Owners did contemplate that the latter would be “named” as additional insureds in an appropriate policy. Complaint, Ex. E., ¶1(d). The intermediate court, however, failed to address the apparent analytical gul f between the unconsummated “naming” of an additional insured and actual status a s a named insured.[J-85-2014] - 6 insured, i.e., the one as to which coverage is to be determined.

* * *

The plain, unambiguous language of the “Separation o f Insureds” clause directs us to evaluate whether [the Property] Owners are insured under the Umbrella Policy as though they are the only named insured, an analytic co nceit that is both clearer and stronger than a severability cl ause that simply identifies the insureds as “several” rather t han “joint.” In no uncertain terms, the policy language directs us to evaluate coverage as though Employer does not exist.

* * *

An insured who does not exist cannot employ anyone. Thus, if the person injured is not employed by the lon e insured as to whom coverage is to be tested, the Employ ers’ Exclusion simply does not come into play. Politopoulos, 75 A.3d at 536-37 (emphasis in original)

. Finally, the Superior Court opined that its reading of the umbrella policy “dovetails with the exclusivity of remedy for an emplo yee under the Workers’ Compensation Act.” Id. at 537 (citing 77 P.S. §481). In this regard, the court elaborated, the Property Owners do not enjoy the prot ection of the exclusivity-ofremedies provision of that enactment and, therefore, t hey had ample reason to seek to insure themselves against liability to employees of Leol a Restaurant. See Politopoulos,

75 A.3d at 537. We allowed appeal both to address the apparent defici t in the Superior Court’s published opinion, see supra note 3, and to consider th e scope of the exclusion in issue, particularly in light of the separation-of-insureds clau se. Initially, Appellant complains of the Superior Court ’s material factual error in denominating the Property Owners named insureds under the terms of a policy which[J-85-2014] - 7

simply does not identify them as such on the declaration s page or otherwise. See supra note 3. Furthermore, according to Appellant, the int ermediate court “manufactured distinctions” between the language of the policies at issu e in PMA and the present case in order to circumvent this Court’s precedent. Brief fo r Appellant at 12. Cf. Brown & Root Braun, Inc. v. Bogan, Inc., 54 Fed. Appx. 542, 5 46-49 (3d Cir. 2002) (finding PMA controlling relative to operative policy terms, includi ng a “modern” separation-ofinsureds clause, materially identical to those presently in issue). But see Arcelormittal Plate, LLC v. Joule Tech. Servs., Inc., 558 Fed. Appx. 205, 211 & n.4 (3d Cir. 2014) (reserving judgment concerning the breadth of PMA, in light of the Superior Court’s decision in the present case). As a policy matter, Appe llant finds the result of the Superior Court’s decision to be incongruous, since it e ffectively results in an entity or individual qualifying as an additional insured attain ing greater liability coverage than afforded to the named insured who actually purchased th e policy. Id. According to Appellant, the opinion also undermines the exclusivity provisions of the WCA by making employers and their insurers pay twice for injuries to e mployees. Appellees, on the other hand, maintain that the sepa ration-of-insureds clause is distinct from the severability-of-interests clause at issue in PMA and, therefore, must be afforded the meaning of the terms actually used, regard less of the propriety of the construction afforded to the language at issue in PMA. Cf. Brief for Amicus Pa. Ass’n for Justice at 10 (“This [separation-of-insureds] clause acts to separate the insureds such that the Employer’s Exclusion applies only to the in sured employer not any insured under the policy.” (emphasis in original)). In particu lar, Appellees note differences between a standard automobile liability insurance contr act with an omnibus provision (extending coverage to persons using the insured vehicle with the permission of the named insured) and a commercial general liability poli cy extending coverage to those[J-85-2014] - 8

having written agreements with the named insured, esp ecially in terms of the contractual basis for coverage pertaining to additional insureds in the latter scenario. Accord Ramara, Inc. v. Westfield Ins. Co., 298 F.R.D. 2 19, 228-29 (E.D. Pa. 2014) (“We agree with the reasoning in Politopoulos that PMA . . . does not control where, as here, the additional insured is covered by virtue of a contr act requiring coverage and where the separation of insureds clause contains language provi ding for an analytical framework whereby we are to consider each insured as if i t is the only insured.”). Further, Appellees contend that PMA does not contrave ne exclusivity under the Workers’ Compensation Act, where the Property Owners do not enjoy the benefit of immunity under such enactment and had ample reason to i nsure themselves against such liability. Supplementing Appellees’ arguments, their amici offer sharper focus. Initially, a group of insurance policyholders elaborate on the com mon pleas court’s perspective concerning the use of the definite article “the” -- as opposed to an indefinite form such as “an” or “any” -- in connection with the word “insur ed.” 4 In this regard, the Policyholder Amici stress that, in various provisos, the po licy at issue employs each of these phrases to achieve distinct aims and effects. For exa mple, these amici observe the term “the insured” is utilized in one proviso to a rticulate the insurer’s indemnity obligations and rights respecting bodily injury and pro perty damage, as follows:

We will indemnify the insured for ultimate net loss in excess of the retained limit because of bodily injury or pro perty damage to which this insurance applies. We will have t he right to associate with the underlying insurer and the insured

4 These amici include: Koppers Holdings Inc., Matthews In ternational Corporation, Mine Safety Appliances Company, LLC, Dravo Corporation, E .W. Bowman, Inc., and United Policyholders [hereinafter the “Policyholder Amici”].[J-85-2014] - 9 to defend any claim or suit seeking damages for bodily i njury or property damage to which this insurance applies. Brief for the Policyholder Amici at 7 (quoting Compla int, Ex. C, §I ¶1(a)) (emphasis in original). Self-evidently, the Policyholder Amici asse rt, “the insured” in this passage refers to the particular insured against whom a claim ha s been asserted. Accord id. at 8 (“The provisions comprising the Insuring Agreement thus use the definite article (‘the’) to refer to, qualify, and differentiate the specific i nsured as to whom the insurer has certain rights (i.e., to associate in the defense) and a s to whom its indemnity obligations are triggered, due, and owing.”). The Policyholder Amici contrast instances in which the policy employs the terms “an” or “any” insured, which th ey believe reflects the intent to capture the broader range of insureds, for example, in the policy’s pollution exclusion provisions. See Complaint, Ex. C, §1 ¶2(h)(1)(c) (exc luding coverage relative to injury or damage relating to pollutants dispersed “[a]t or f rom any premises, site or location which is or was at any time used by or for any insured” (emphasis adjusted)). Amicus the Pennsylvania Association for Justice further cont ributes references to cases from other jurisdictions, concluding that the wide ma jority of jurisdictions take a narrower view of employer’s liability exclusions pertai ning to employees of “the insured.” In particular, the Association highlights one federal co urt’s depiction of Pennsylvania’s contrary approach, as reflected in PMA, as being “archa ic and isolated in the context of the laws of the federal union.” Costco Wholesale Corp. v. Liberty Mut. Ins. Co., 472 F. Supp. 2d 1183, 1203 (S.D. Cal. 2007) (quoting, indi rectly, Paul A. Freund, Chief Justice Stone and the Conflict of Laws, 59 H ARV

. L. R EV . 1210, 1216 (1946)); see also id. at 1202 (observing that, “[i]n the current legal landscape , Pennsylvania belongs to a small minority of states that interpret employer’s liability exclusions broadly to bar coverage for lawsuits brought by employees of any named insured” ).[J-85-2014] - 10

Upon our review, preliminarily, we find that the S uperior Court’s decision cannot be sustained on its terms, for the reasons explained by A ppellant and set forth above. There simply is no basis in the umbrella policy to suppor t the intermediate court’s treatment of the Property Owners as named insureds. Fu rthermore, the court’s broader analysis is clouded by this mislabeling and the court’s corr esponding invocation of an inapplicable subparagraph of the separation-of-insured s clause. Accord Ohio Cas. Ins. Co. v. Holcim (US), Inc., 744 F. Supp. 2d 1251, 1271 n.28 (S.D. Ala. 2010) (“The portion of [a separation-of-insureds] clause stating t hat the insurance applies ‘as if each Named Insured were the only Named Insured’ has no concei vable bearing” on disputes involving persons and entities who are, at most, insur eds or additional insureds but not named insureds (citation omitted)). In considering the matter anew, we begin with the in terrelationship between a separation-of-insureds clause and an employer’s liabilit y exclusion. As explained, generally a separation-of-insureds clause indicates that insurance applies separately to each insured against whom claim is made. See, e.g., Com plaint, Ex. C, §V ¶14(b). As a general rule, neither a separation-of-insureds clause nor its analogue, a severabilityof-interests provision, is to be interpreted in a mann er which would subvert otherwise clear and unambiguous policy exclusions. See, e.g., Holci m, 744 F. Supp. 2d at 1271- 72 & n.29 (collecting cases and explaining that “courts fr om many jurisdictions have emphasized that a separation of insureds provision is n ot designed to, and does not have the effect of, negating plainly-worded exclusions” ); BP Am., Inc. v. State Auto Prop. & Cas. Ins. Co., 148 P.3d 832, 839-41 & nn.32 -44 (Okla. 2005) (“[C]learly most courts addressing the issue of whether a severability clause will render a clear and unambiguous exclusionary provision doubtful determine t hat the clear language of the exclusion must prevail.”); Am. Wrecking Corp. v. Burling ton Ins. Co., 946 A.2d 1084,[J-85-2014] - 11

1089 (N.J. Super. 2008) (explaining that a separation -of-insureds clause does not create ambiguity, but merely spreads protection among i nsureds, without negating plainly-worded exclusions). This widely-accepted underst anding is consistent with one facet of this Court’s decision in PMA. See PMA, 426 Pa . at 459, 233 A.2d at 552 (commenting on the insignificance of modest variations a mong severability-of-interests clauses as compared with the importance of clarity in pol icy exclusions). Accordingly, the appropriate focus here is less upon the specific wording of the separation-of-insureds clause than on the terms of the e mployer’s liability exclusion. See Holcim, 744 F. Supp. 2d at 1271 (explaining that “the construction of [a separationof-insureds] clause in conjunction with a particular cont ractual exclusion turns on the exclusion’s precise wording”); see also Abbeville Offshore Quarters Inc. v. Taylor Energy Co., 286 Fed. Appx. 124, 128 (5th Cir. 2008) . It is in this respect – namely, in the construction of the employer’s liability exclusion und er review – that PMA departed from the wider body of decisional law. Consistent with the explanation provided by Judge Wri ght of the common pleas court, and as further developed by the Policyholder Am ici, a majority of jurisdictions recognize potential differences in meaning which may be taken from the selective use of

definite and indefinite articles in association with th e word “insured” as employed in insurance policy exclusions. See, e.g., Postell v. Am. Fa mily Mut. Ins. Co., 823 N.W.2d 35, 46 (Iowa 2012) (discussing instances in which an insure r “communicate[s] that, under [a] policy, the term insured does not always mean ‘any’ insured person, but sometimes, only ‘the’ insured claiming coverage”); Osbon v. Nat’l Union Fire Ins. Co., 632 So.2d 1158, 1160 (La. 1994) (“Courts in other ju risdictions generally focus on the article modifying the word ‘insured,’ specifically, ‘the ’ insured, ‘an’ insured, and ‘any’[J-85-2014] - 12

insured”). 5 Such potential differences, where recognized by the courts, have been taken to reflect ambiguities, thus requiring construction of salient policy language on the terms most favorable to the insured. Accord, e.g., Maryl and Cas. Co. v. Am. Fidelity & Cas. Co., 217 F. Supp. 688, 691 (E.D. Tenn. 1963) (q uestioning why, if an insurance

5 See also Penske Truck Leasing Co. v. Republic W. Ins. Co ., 407 F. Supp. 2d 741, 751 (E.D.N.C. 2006) (“[W]here [an employer’s liability e xclusion] bars coverage for bodily injury to [an employee of] ‘the’ insured, and the p olicy specifically designates the ‘insured’ as the insured who is seeking coverage [via a se paration-of-insureds provision], it would not be logical to bar coverage wh ere an additional insured . . . is being sued by an individual who may be an employee of the named insured but who is, vis-à-vis [the additional insured], merely a member of the general public.”); Boise Cascade Corp. v. Reliance Nat’l Indem. Co., 99 F. Supp . 2d 87, 101 (D. Me. 2000) (determining that an employer’s liability exclusion dir ected to claims asserted by employees of “the insured” did not apply to claims asse rted by an individual who was not an employee of the particular insured against whom the claim was directed); Motorists Ins. Cos. v. BFI Waste Mgmt., 728 N.E.2d 31, 37 (Ohio Ct. App. 1999) (same); Michigan Mut. Liability Co. v. Ohio Cas. Ins. C o., 333 N.W.2d 327, 332 (Mich. Ct. App. 1983) (indicating, in the context of an auto mobile liability policy, that “the exclusion for injury to an employee of ‘the insured’ d eprives no one of coverage except with respect to his own employees” (quoting Shelby Mut. Ins. Co. v. Schuitema, 183 So.2d 571, 573 (Fla. Ct. App. 1996)), overruled on other grounds as recognized in Century Mut. Ins. Co. v. League Gen. Ins. Co., 541 N. W.2d 272, 274-75 (Mich. Ct. App. 1995).

Parenthetically, in terms of “any insured” exclusions, th e main controversy appears to center, not on whether the term unambiguously implicat es any or all insureds, but upon whether such meaning should be narrowed to the insured against whom a claim is asserted in light of a separation-of-insureds clause. Se e, e.g., Allan D. Windt, 3 I NS

. C LAIMS AND D ISPUTES §11:8 (6th ed. 2014) (framing the different lines o f authority). The great majority of courts, however, merely apply the rule that a separation-of-insureds clause does not negate the effect of a plainly worded ex clusion. Accord id. (citing cases and explaining that, “as applied even independently to each insured, an ‘any insured’ exclusion unambiguously eliminates coverage for each and every insured”).[J-85-2014] - 13

company intended for “the insured” to mean “any insure d,” the insurer would not utilize the latter term). 6 PMA departed from this line of reasoning, relying p rimarily on two cases arising in the automobile liability insurance setting: Patton v. Patton, 413 Pa. 566, 198 A.2d 578 (1964), and Great American Insurance Co. v. State Farm Mutual Automobile Insurance Co., 412 Pa. 538, 194 A.2d 903 (1963). Se e PMA, 426 Pa. at 458-59, 233

A.2d at 551-52. Both held that a household exclusion in a motor vehicle liability policy pertained to family members of named insureds seeking r ecompense from omnibus insureds, by virtue of the exclusion’s direction to “bodi ly injury to the insured or any member of the family of the insured residing in the sa me household as the insured.” Patton, 413 Pa. at 570, 198 A.2d at 580; Great Am., 412 Pa. at 540-41, 194 A.2d at 904 (emphasis added). PMA bluntly transposed the usage from this discrete context (which particularity encompasses the coupling of “the insured” with “any member of the family of the insured”) into the setting of an employer’s lia bility exclusion. Such transposition, and the manner in which it was accomplished, suggests that PMA stands for the proposition that the term “the insured” always signifie s “all insureds” (and thus encompasses the named insured even where no claim has bee n asserted against the named insured), regardless of contextual cues or comparat ive usage across the wider

6 The courts’ task in insurance policy interpretation and construction is centered on ascertaining the intent of the parties to the agreemen t. See Madison Constr. Co. v. Harleysville Mut. Ins. Co., 557 Pa. 595, 606, 735 A. 2d 100, 106 (1999) (citing Gene & Harvey Builders v. Pennsylvania Mfrs. Ass'n, 512 Pa. 420 , 426, 517 A.2d 910, 913 (1986)). Consistent with ordinary principles of contract interpretation, where a policy provision is ambiguous, it is generally construed against t he insurance company as the drafter of the agreement. See id. This precept dov etails with the approach, reflected in decisions of our intermediate courts, that policy exclusion s are to be construed narrowly in favor of coverage. See, e.g., Eichelberger v. War ner, 290 Pa. Super. 269, 275, 434 A.2d 747, 750 (1981).[J-85-2014] - 14

terms of a policy. This is why Judge Wright reasonably b elieved that he was bound to extend PMA’s holding into the context of an employer’ s liability exclusion appearing in a commercial liability policy, although he strongly disagr eed with PMA’s approach as to

such exclusion. 7 Upon consideration of the broader range of authoriti es and the reasoning which they provide -- which were not overtly considered in P MA -- we decline to extend PMA’s expansive construction of the term “the insured” to an i nstance in which a commercial general liability policy variously makes use of the ter ms “the insured” and “any insured.” Cf. Newman v. Mass. Bonding & Ins. Co., 361 Pa. 587, 5 91, 65 A.2d 417, 419 (1949) (explaining, in the interpretation of an insurance po licy, “[t]he court must give effect to every word that can be given effect”). Rather, we ar e persuaded that, at least where a commercial general liability policy makes varied use of t he definite and indefinite articles, this, as a general rule, creates an ambiguity r elative to the former, such that “the insured” may be reasonably taken as signifying the particular insured against whom a claim is asserted. Accord Windt, 3 I NSURANCE C LAIMS AND D ISPUTES §11.14 (“If the exclusion is written to apply to an employee of the in sured, as opposed to any insured, . . . the exclusion should not apply to a claim against an insured entity that is not the

7 Notably, the PMA Court took pains to solidify the posi tion that the term “the insured,” as used in an employers’ liability exclusion, consistently encompasses named insureds. See, e.g., PMA, 426 Pa. at 456, 233 A.2d at 550 (“’ The insured’ . . . merely has been interpreted as the language dictates, to include the n amed insured.”). Accordingly, although the PMA Court forcefully denied that it had equated the terms “the insured” and “any insured,” id. (“‘The insured’ has not been interpreted to mean ‘an insured’ or ‘any insured.’” (emphasis in original)), we are unable to discern any meaningful distinction between such permutations left in PMA’s wake ( at least on the specific terms of the decision). Indeed, while Appellant may not say so explicitly, its present argument rests on the notion that PMA effectively made “the insu red” and “any insured” interchangeable. Accord Costco, 472 F. Supp. 2d at 120 3 (commenting on the broad impact of PMA relative to the meaning of “insured” in any given context).[J-85-2014] - 15

employer.”). 8 Moreover, the separation-of-insureds clause, in this c ontext, serves only to reinforce such an understanding. Accord Holcim, 744 F . Supp. 2d at 1271 (collecting cases and explaining that “the distinction that surfaces t ime and again in the case law is that separation of insureds clauses affect interpretati on of policy exclusions using the term ‘the insured’ (essentially modifying that term to mean ‘the insured claiming coverage’), but have no effect on the interpretation of exclusions using the term ‘an insured’ or ‘any insured.’”); Postell, 823 N.W.2d at 4 6. 9

8 We have framed the above proposition in terms of a g eneral rule, because other indications and contextual cues appearing in an insura nce policy may serve to render the meaning of “the insured” more apparent. This see ms to be the case relative to the household exclusion appearing in vehicle liability pol icies, as construed in Patton and Great American. See Patton, 413 Pa. at 570, 198 A.2 d at 580; Great Am., 412 Pa. at 540-41, 194 A.2d at 904. Notably, in this regard, t hese decisions are consistent with the majority view that such exclusion encompasses liability fo r injuries to family members of the named insured, regardless of whether the tortfeasor also is an insured under the salient vehicle liability policy. See generally Steve n Plitt, Daniel Maldonado, Joshua D. Rogers, and Jordan R. Plitt, 8 C OUCH ON I NS . §114:48 (3rd ed. 2014) (“The fact that the harm is casued by an omnibus insured does not affect the a pplicability of the policy exclusion of claims as to household members.” (footnote omitted)).

A collateral consequence of decisions such as PMA which take a less circumspect approach, resting broad-reaching conclusions on limited re asoning, is that they foster efforts toward avoidance in the intermediate courts, wh ich are often problematic in their own right. Examples pertinent to the present setting include the Superior Court’s decision under review, see supra note 3, and Luko v. Ll oyd’s London, 393 Pa. Super. 165, 176, 573 A.2d 1139, 1144 (1990). See Brown & Root Braun, 54 Fed. Appx. At 549 (observing that Luko “fails to distinguish PMA adequatel y”); Costco, 472 F. Supp. 2d at 1202 (commenting that “the Luko court disregarded PMA” ).

9 Appellant also argues that the umbrella policy provi ded a specific avenue to afford protection to the Property Owners, namely, the creatio n of an “insured contract” serving as an express exception to the employer’s liability exclu sion. See Complaint, Ex. C, Employer’s Liability Exclusion (rendering the clause inap plicable to “liability assumed by the insured under an ‘insured contract’”). We disagre e with Appellant’s position, however, to the degree to which it suggests that such pr escription alleviates the ambiguities arising from the remaining text of the ex clusion. (Tcontinued)[J-85-2014] - 16

In summary, we conclude that the employer’s liability e xclusion in the umbrella policy is ambiguous. Application of governing principle s of insurance policy construction yields the understanding that the ambiguous exclusionary language pertains only to claims asserted by employees of “the insured” against who m the claim is directed, which understanding gains further support by reference to the policy’s separation-ofinsureds provision. Since the Property Owners are not M s. Denovitz’s employers, the employer’s liability exclusion is inapplicable. The order of the Superior Court is affirmed, albeit on different grounds.

Former Chief Justice Castille and former Justice McCaffery did not participate in

the decision of this case. Mr. Justice Baer, Madame Justice Todd and Mr. Justice Steven s join the opinion. Mr. Justice Eakin files a concurring opinion.

(continuedT)

In terms of Appellant’s contentions grounded in social p olicy, we find that the policy concerns are mixed. In this regard, it is self-evident both that an insurance company legitimately would wish to focus upon the narrowest ave nue of benefits relative to claims asserted by employees of a named insured (i.e., workers’ compensation insurance), whereas, a lessor just as appropriately would seek to enj oy protection against the broadest range of claims (to include those asserted by emp loyees of the lessee). Appellant’s “double payment” argument downplays both this diversity in the interests present and the potential impact of an employer’s subr ogation rights relative to workers’ compensation payments. See 77 P.S. §671. Thus, we d ecline to afford the position controlling significance here.