T.H.E. Insurance Co. v. City of Alton

This case arose from several deaths caused by an explosion during a Fourth of July fireworks display. The decedents were employed by Fireworks Partners, Inc. ("FPI") as "shooters". The families sued the city sponsoring the firework display. The city sought coverage as an additional insured for the claims under FPI’s comprehensive general liability policy. The policy contained an exclusion excluding coverage for bodily injury to shooters. The insurer filed a declaratory judgment action on coverage and obtained summary judgment, which the insured appealed. The Court of Appeals upheld the summary judgment.

The insurer had issued a certificate of insurance to the city stating that the city was an additional insured. The certificate contained a standard disclaimer stating "This certificate neither affirmatively nor negatively amends, extends or alters the coverage afforded by the policy described hereon." The certificate did not mention the exclusion for bodily injuries to shooters. The city argued that the certificate conflicted with the policy and that coverage should therefore be extended.

The Court of Appeals noted a line of cases which states that when the certificate of insurance does not refer to the policy, and the terms of the certificate conflict with the terms of the policy, the certificate governs the extent and terms of coverage. International Ampitheatre Co. v. Vanguard Underwriters Ins. Co., 532 N.E.2d 493 (Ill. 1988). On the other hand, if the certificate references the policy and expressly disclaims any coverage other than that contained in the policy itself, the policy governs the extent and terms of coverage. Thus, the Court of Appeals held that the city was on notice that coverage was governed by the policy and not the certificate and upheld the summary judgment in favor of the insurer.