Opinion ID: 2313119
Heading Depth: 3
Heading Rank: 5

Heading: The Liberty Policies are enforceable

Text: Liberty also argues that a construction in favor of Conrail would provide coverage for Conrail's own negligence in contravention to legislatively defined public policy that precludes contractual indemnification for a party's own negligence. [49] Pacific responds that 6 Del. C. § 2704 applies to construction contracts, not to liability insurance policies issued to insure against losses or damages due to the insured's own negligence. In Chrysler Corp. v. Merrell & Garaguso, Inc ., this Court addressed a similar issue in determining whether the statutory restriction in 6 Del. C. § 2704, which precludes an owner from requiring a contracting party to indemnify against the indemnitee's own negligence, also invalidate[s] the enforceability of liability insurance purchased for the benefit of the owner. [50] We held: While we agree that the requirement to purchase insurance may, under certain circumstances, be unenforceable, we reject the inference that such insurance, once secured, is unenforceable against the issuer of the insurance. [51] Further: [T]he insurance savings provision reflected in [6 Del. C. § 2704(b)] is a statement of legislative purpose that cannot be negated by an all-encompassing construction of the anti-indemnification policy set forth in [6 Del. C. § 2704(a)]. The savings provision has meaning only if it cannot be used as a shield by insurers to decline coverage for insurance once purchased and duly issued to any insured, however identified or designated. [52] The insurance at issue here was purchased from Liberty by Julian and is enforceable against Liberty. Insurance companies are sophisticated entities who can protect their own interests either in refusing to issue additional insured coverage or restricting such coverage with notice to the insured or third parties. [53] Consistent with our holding in Chrysler, Liberty had a duty to defend Conrail. The Superior Court erred in granting summary judgment in favor of Liberty.