Opinion ID: 2313119
Heading Depth: 3
Heading Rank: 2

Heading: Arising out of is construed broadly under Delaware law

Text: We turn next to the issue of whether Conrail, as an insured under the Liberty Policies, falls within the second aspect or condition of the Additional Insured Clause; that is, whether the coverage Conrail seeks is based on liability arising out of Julian's operations. We agree with the Superior Court that the language of the Additional Insured Clause is unambiguous and that its plain meaning controls. By its express terms, the Liberty Policies provide coverage for Conrail only with respect to liability arising out of [Julian's] operations. [39] Thus, our focus must be upon the scope of the term arising out of as defined in the Liberty Policies. This Court has previously held that, under general insurance contract principles, and consistent with New York law, the term arising out of is one that lends itself to uncomplicated common understanding. [40] Specifically, if there is some meaningful linkage between the product and the third party claim, the `arising out of' language unambiguously applies. [41] Cases from other jurisdictions also establish extensive support for a broad construction of that phrase. [42] We agree and hold that under Delaware law, the term arising out of is broadly construed to require some meaningful linkage between the two conditions imposed in the contract. Here, Liberty's coverage of Conrail (that is, whether Liberty has a duty to defend Conrail) under the Additional Insured Clause depends on whether there was a meaningful linkage between Julian's operations and Conrail's resulting liability in the wrongful death actions.