Recently, in Security National Ins. Co. v. Construction Associates of Spokane, No. 20-167 (E.D. Wash. Mar. 24, 2022), a Washington federal court concluded that an insurer breached its duty to defend a party as an additional insured and that its conduct amounted to bad faith.
The court, in reaching its decision, pointed to the fact that the adjuster did not consider a relatively recent Washington Supreme Court opinion that dictated that a defense was, in fact, owed.
In T-Mobile USA, Inc. v. Selective Ins. Co. of Am., 194 Wn.2d 413, 450 P.3d 150 (2019), the court held that the insurer was bound by the representation of its authorized agent in a Certificate of Insurance that an organization was an additional insured even though the Certificate said that it could not be used to expand coverage beyond that provided in the insurance policy.
Before the T-Mobile decision, case law dictated that a Certificate of Insurance could not expand coverage provided by the insurance policy. The court characterized the overlooked decision as a ‘blockbuster’ for coverage law.