Opinion ID: 866581
Heading Depth: 4
Heading Rank: 2

Heading: Policy as a Whole

Text: Second, “the policy as a whole,” Cement, Sand & Gravel, 30 N.W.2d at 345, supports our plain reading of the particular provisions at issue in this case. Aside from the causation requirement, the policy as a whole places few limits on Harleysville’s obligation to cover insured contracts like the one between PDSI and Miller. In sharp contrast to the insurance contract interpreted by the Minnesota Supreme Court in Bolduc, the contract in this case does not exclude coverage for the indemnitee’s “independent acts or omissions,” Bolduc, 825 N.W.2d at 705-06. Neither does Harleysville’s contract exclude the category of damages at issue, unlike the contract in Bolduc. Cf. id. at 709-10. Harleysville’s reliance on Bolduc is misplaced. To be sure, the Minnesota Supreme Court in Bolduc interpreted an additional insured provision to cover only an indemnitee’s vicarious liability for the indemnitor’s fault. Id. at 707. But the Bolduc court expressly noted its interpretation was “properly based on [its] reading of the precise wording of the [Bolduc] provision as a whole, in the context of th[e] particular insurance policy [at issue in Bolduc].” Id. at 707 n.8 (emphasis added). The Minnesota Supreme Court reached its conclusion through a process of elimination—the Bolduc contract covered only vicarious liability because the insurance contract expressly excluded coverage for every other form of liability.14 Id. at 707-10. Of particular relevance to this case, the Bolduc contract excluded coverage for the indemnitee’s direct liability (i.e., liability imposed “when one party instruction given on PDSI’s behalf—moves beyond but-for causation. We thus find it unnecessary to specify the exact level of causation required by PDSI’s insurance contract with Harleysville. 14 Unlike this case, Bolduc involved property damage. See Bolduc, 825 N.W.2d at 707. The Minnesota Supreme Court found only three ways the indemnitee in Bolduc could become liable for property damage: (1) direct liability, (2) vicarious liability for the indemnitor’s fault, and (3) contractual liability to a third party. See id. at 707-09. The Bolduc contract expressly excluded coverage for the first and third paths to liability. See id. at 710. -15- has breached a personal duty . . . through his own negligence,” Sutherland v. Barton, 570 N.W.2d 1, 5 (Minn. 1997)). See Bolduc, 825 N.W.2d at 707. And in Bolduc, a jury found the indemnitor was not negligent. See id. at 701. This case differs on both counts. PDSI’s insurance contract with Harleysville does not exclude coverage for Miller’s liability to Hughes. And though Miller settled Hughes’ claims, no jury has found either PDSI or Miller not negligent. Both PDSI and Miller now agree that PDSI partly “caused” Hughes’ injuries. Far from excluding coverage for PDSI’s liability to Miller, other parts of the policy impliedly include such coverage. Although the policy broadly excludes coverage for bodily injury to “[a]n ‘employee’ of the insured arising out of and in the course of . . . [e]mployment by [PDSI],” the policy expressly exempts PDSI’s liability to Miller from this exclusion: “[t]his exclusion does not apply to liability assumed by the insured under an ‘insured contract.’” The policy ordinarily would exclude coverage for Hughes’ bodily injuries because he was a PDSI employee. Cf. id. at 70910. But the policy expressly did not apply this exclusion to contractually assumed liabilities, which strongly implies the contract covers PDSI’s contractually assumed liability for bodily injuries to PDSI employees. Because the liability at issue in this case arises directly from PDSI’s agreement with Miller, the contract covers Hughes’ injuries despite the fact that the injuries occurred while Hughes was working for PDSI. On the whole, the policy covers PDSI’s liability to Miller for Hughes’ settlement.