California Court Invokes Equity to Stretch Anti-Subrogation Rule Principles

Gus Sara | The Subrogation Strategist | May 2, 2019

In Western Heritage Ins. Co. v. Frances Todd, Inc. 2019 Cal. App. Lexis 299, the Court of Appeals of California, First Appellate District, addressed whether a commercial condominium association’s carrier could subrogate against the tenants (aka lessees) of one of its member unit owners. After examining the condominium association’s declarations, as well as the lease terms between the owner and the lessees, the court held that the association’s carrier could not subrogate against the lessees because they were implied co-insureds on the policy. To reach its decision, the court explained that an insurer steps into the shoes of its insured, not the party with whom it is in privity. Although the first-party property portion of the association’s insurance policy did not, as required by the association’s declarations, have the owner listed as an additional named insured, the court held that it would be inequitable to treat the association as the sole insured for purposes of determining Western Heritage’s right to bring a subrogation action.

In Western Heritage, William R. de Carion d/b/a Surfwood Properties (de Carion or Lessor), owned a commercial unit within a multi-unit commercial building. The building was managed by the East Shore Commercial Condominiums Owners’ Association (the Association). As a unit owner, de Carion was a member of the Association. The Association’s Declarations of Codes, Covenants and Restrictions (CC&Rs) required the Association to procure fire insurance for the commercial units by adding the unit owners as additional named insureds. The CC&Rs also prohibited owners and their “tenants” from procuring their own fire insurance policies for the premises. In 2013, de Carion leased his commercial space to Frances Todd, Inc. d/b/a The Wooden Duck, Eric Todd Gellerman and Amy Frances Feber (Lessees).

The lease agreement required Lessees to keep the premises in good repair. It also included a “yield up” clause, requiring Lessees to surrender the premises at the end of the tenancy in substantially the same condition as they received it, except in the event of a “casualty.” The lease also required that Lessees indemnify de Carion for any liability resulting from Lessees’ negligence, and required Lessees to maintain liability insurance. The lease made no mention of fire insurance.

In 2014, a fire erupted within Lessees’ space. The fire damaged de Caron’s unit and other nearby property. At the time of the fire, the Association had a fire insurance policy with Western Heritage, which paid to repair the damages. Despite the requirement in the CC&Rs that unit owners be added as additional named insureds on the Association’s policy, the policy did not have de Carion listed as an additional named insured with respect to first-party property coverage.

In 2015, Western Heritage filed a subrogation action against Lessees. In 2016, Lessees filed a motion for summary judgment, arguing that they were implied co-insureds under the policy. Western Heritage opposed the motion, arguing that the defendants were not implied co-insureds because the lease held Lessees responsible for property damage and the Association was not a party to the lease.

The Court of Appeals acknowledged California precedent holding that a lessee is not responsible for negligently caused fire damages where the lessor and lessee intended the lessor’s fire policy to be for their mutual benefit. The court cited prior decisions holding that if the lease states that fire insurance will be used to repair fire damages, then all parties to the lease are considered co-insureds to the policy, thereby barring subrogation. The court further cited cases holding that if a lease holds the lessor responsible for repairing damages caused by fire, then it is implied that the lessor will procure insurance on the premises for the benefit of the tenant as well.

Focusing on the facts of this case, the court found that the lease required Lessees to maintain liability insurance, but not fire insurance, implying that de Carion would carry fire insurance. Further, the court found that the CC&Rs governing the property required the Association to name de Carion as an additional named insured on the Association’s insurance policy. In addition, the court found that owners such as de Carion, and tenants such as Lessors, were prohibited by the CC&Rs from purchasing individual fire policies. Further, the court noted that the “yield-up” clause in the lease provided that Lessees would surrender the premises in substantially the same condition as it was on the first day of the lease, except that Lessees would not be responsible for repairs caused by casualties. Thus, the yield up clause implied that Lessor would procure fire insurance for the benefit of Lessees. Considering these findings together, the court held that Lessees were implied co-insureds on the Western Heritage policy.

In reaching this holding, the court rejected Western Heritage’s arguments that: 1) it stood in the Association’s shoes, not de Carion’s shoes, for purposes of subrogation; and 2) de Carion was only listed as an additional insured under the commercial liability section of the policy, not the first-party fire coverage. As argued by Western Heritage, pursuant to the anti-subrogation rule, because the Association did not add de Carion as an additional insured for the loss at issue, it could proceed against Lessees. The court noted, however, that although the Association did not add de Carion as an additional named, it was contractually obligated to do so by the CC&Rs. In addition, the CC&Rs provided that the insurer who issued the Association’s and de Carion’s first-party coverage would include a waiver of subrogation clause waiving subrogation against both owners and tenants in the Association’s condominiums. In light of the Association’s contractual requirements, as set forth in the CC&Rs, the court held that it would be inequitable to treat the Association as the sole insured for purposes of Western Heritage’s right to bring a subrogation action to recover the amounts it paid under its fire policy.

The Western Heritage case reminds subrogation professionals that courts may invoke equitable principles when determining subrogation-related issues. Although courts often consider the insured with whom the insurer is in privity to be the party in whose shoes the insurer steps, courts may invoke equitable principles to determine that the insurer steps into the shoes of all named insureds under the policy, even insureds with whom the insurer is not in privity. In addition, Western Heritage reminds us that, when determining whether a commercial lessee in California is an implied co-insured on its lessor’s insurance policy, it is important to look at all of the terms of the lease to determine whether the lessee will be held responsible for damages caused by casualties. Even if the lease does not, explicitly, hold a lessee responsible for damages caused by casualties and require the lessee to have fire insurance, the lessee may be deemed an implied co-insured. If the court finds that the lessee is an implied co-insured, subrogation against the lessee will be barred.

Subrogation Waiver in Construction Contract Upheld by Wisconsin Court

Claims Journal | June 21, 2019

A subrogation waiver in a construction contract blocks an insurer’s claim against a contractor whose alleged shoddy construction caused the collapse of a barn that cost more than $600,000 to replace, the Wisconsin Supreme Court ruled in a split decision.

The high court, ruling 3-2, found that the subrogation waiver was not an “unenforceable exulpatory contract” that runs contrary to Wisconsin public policy. The decision in Rural Mutual Insurance Co. v. Lester Buildings and the Phoenix Insurance Co. means that Rural cannot collect in its subrogation suit against Phoenix, an Oklahoma-based Travelers’ unit.

Rural, a Wisconsin-based carrier, argued that the subrogation waiver in a contract signed by Jim Herman Inc. violated Wisconsin statute 895.447, which states that provision of a construction contract that eliminates tort liability “is against public policy and void.”

“Rural Mutual received a benefit, in the form of premium payments, for expressly allowing its insured to allocate risk in this way,” the majority opinion written by Justice Rebecca Frank Dallet states.”We will not rewrite Rural Mutual’s policy to exonerate it from a risk that it contemplated and for which it received a premium.”

Justices Daniel Kelly and Ann Walsh Bradley dissented. Kelly said in a dissenting opinion that it has been longstanding precedent in Wisconsin that “an individual is personally liable for his own tortious conduct.” He said the Supreme Court’s decision effectively transferred tort liability from the contractor, Lester Buildings LLC, to Rural Mutual.

The dispute stems from the collapse of a barn on a Jim Herman Inc. farm in May 2013. Herman had contracted with Lester Buildings to construct the structure in 2010. That contract contained the subrogation waiver in question.

High winds sheared the top of the barn off, scattering lumber and killing and injuring Herman’s cattle. Rural paid $607,000 to rebuild the bar and $51,000 to replace the cattle.

Rural Mutual filed suit against Lester Buildings and its insurer, Phoenix, alleging that Lester had improperly installed rebar cages in the concrete piers that supported the roof. Lester Buildings and Phoenix filed cross claims against Van Wyks, a company that was subcontracted to pour the concrete.

Both the trial court in Dane County and the Court of Appeals, however, found that the subrogation waiver is enforceable and Rural Mutual could not collect. The Supreme Court narrowly upheld those rulings.

“The dissent improperly equates collection of damages with liability and asserts that if Herman cannot collect all of its damages from the contractors, then the contractors’ liability is limited,” the court said. “However, the contractors could be 100 percent liable for wrongful conduct but, based on the subrogation waiver expressly allowed by Rural Mutual’s policy, Rural Mutual could be responsible for paying damages to Herman for property loss.”

Kelly’s dissent counters: “Where the Legislature said that a contract may not limit a tortfeasor’s liability, the court heard that a contract may not limit the victim’s right to be made whole. These are not the same things. Because the court said they are, I respectfully dissent.”

New York Court Holds That the “Lesser of Two” Doctrine Limits Recoverable Damages in Subrogation Actions

Michael DeBona | White and Williams | June 12, 2019

In New York Cent. Mut. Ins. Co. v. TopBuild Home Servs., Inc., 2019 U.S. Dist. LEXIS 69634 (April 24, 2019), the United States District Court for the Eastern District of New York recently held that the “lesser of two” doctrine applies to subrogation actions, thereby limiting property damages to the lesser of repair costs or the property’s diminution in value.

In New York Cent. Mut. Ins. Co., New York Central Mutual Insurance Company’s (New York Central) insureds, Paul and Karen Mazzola, suffered a fire to their home. After the fire, New York Central paid the Mazzolas $708,465.74 to repair the property. New York Central brought a subrogation action against TopBuild Home Services, Inc. (TopBuild), alleging that the fire was caused by negligent work performed by TopBuild. New York Central sought to recover the repair costs it paid to the Mazzolas. TopBuild conceded liability but disputed the proper measure of damages.

TopBuild filed a motion for partial summary judgment, arguing that under the “lesser of two” doctrine, New York Central could recover only the lesser of the costs to repair the property or the property’s diminution in value. TopBuild, therefore, asserted that New York Central was not entitled to the repair costs of $708,465.74 but, rather, could recover only the property’s decline in value following the fire – approximately $250,000.[1] In response, New York Central argued that New York’s “lesser of two” doctrine does not apply to subrogation actions because an insurance company cannot mitigate the payment it makes to its insured.

The Eastern District of New York found New York Central’s argument unavailing. The court found that a subrogating carrier must step into the shoes of its insured and, therefore, the carrier could not recover more than its insured was legally entitled. Accordingly, the court granted partial summary judgment for TopBuild, holding that, in subrogation actions, “the proper measure of damages for permanent injury to real property is the lesser of the decline in market value and the cost of restoration.”

New York Cent. Mut. Ins. Co. serves as a reminder that subrogating insurers step into their insured’s shoes. Thus, although insurers may issue a contract of insurance that allows an insured to collect replacement and/or restoration costs, insurers can recover the amount it paid its insured only if state law allows the insured to recover that amount from the tortfeasor had the insured sued the tortfeasor directly.

[1] Defendant’s expert determined the diminution in value to be $245,000 while the plaintiff’s expert determined that the diminution in value was $270,000. Because the only issue before the court was whether the “lesser of two” doctrine applied, the court did not need to resolve the party’s dispute as to the diminution in value.

Subrogation, Insurance Code Section 11580, and the Craziness We Call Insurance Law

Garret Murai | California Construction Law Blog | May 9, 2019

Public domain

If you want to geek out on insurance law the next case is for you. The Insurance Company of the State of Pennsylvania v. American Safety Indemnity Company, 2nd District Court of Appeals, Case No. B283684 (March 1, 2019), is an interesting case involving Insurance Code Section 11580, which in essence provides that if a  judgment is entered against an insured (and there is coverage for that insured) the insured may sue the insurance company to pay for the judgment.

However, in this case, the party doing the suing was the insurer of a general contractor that had a judgment entered against it, and the party being sued was the insurer of subcontractor, on subrogation basis.

Interesting stuff, if you’re into these kinds of things.

The Insurance Company of the State of Pennsylvania Case

Unlike Alexandre Dumas’ The Count of Monte Cristo with requires a flow chart to understand the relationships between its more than 38 characters, we thought it might be helpful to sort out the characters upfront so that you can understand the story that follows:

  • Amir and Brenda Moghadam: Homeowners who bought a home built by New Millennium Homes LLC (NMH) and later sued NMH for construction defects obtaining an award in arbitration against NMH of approximately $1.2 million.
  • New Millennium Homes: Builder of Amir and Brenda Moghadam’s home that sued its subcontractor Camarillo Engineering, Inc. (Camarillo) for the damages sought by the Moghadams in their arbitration and obtained a default judgment against Camarillo of approximately $1.5 million.
  • Camarillo Engineering: The mass grading, compacting and finish grading subcontractor hired by NMH that was supposed to have named NMH as an additional insured under its commercial general liability policy, but didn’t.
  • The Insurance Company of the State of Pennsylvania (ICSP): NMH’s excess liability insurer and the one who ultimately had to pay the Moghadams.
  • American Safety Indemnity Company (ASIC): Camarillo’s commercial general liability insurer who refused to indemnify Camarillo against NMH’s default judgment against Camarillo.


The scene takes place in lovely Calabasas, California. Amir and Brenda Moghadam purchase the house of their dreams from NMH. It’s a sprawling estate of more than 15,000 square feet on over an acre of land. A rather largish man could live quite comfortably, and subsist quite nicely I’m sure, in one of the pantries.

They buy furniture. They decorate. They magically transform what was once just a house into a “home.” But happily ever after it wasn’t to be. They begin noticing “drywall and stucco cracks, separation and cracking of interior tiles, and lifting of exterior flagstones.” An ensuing geotechnical investigation reveals that there is “differential fill settlement, as well as expansive soil activity” and that “an inadequate design and construction of the post-tension slab foundation system are exacerbating the distress.” A construction engineer hired to conduct an investigation shakes his head, shrugs his shoulders and tells the Moghadams that their house would be better torn down and rebuilt. The Moghadams sue.

Chapter 1 – NMH Sues Camarillo

Upon being sued by the Moghadams, NMH, pursuant to its subcontract with Camarillo, tenders defense of the Moghadams’ claim to Camarillo’s commercial general liability insurer ASIC. After several unsuccessful attempts, ASIC informs NMH that Camarillo did not name NMH as an additional insured under its policy issued to Camarillo.

Desperate, NMH sues Camarillo for contractual and equitable indemnity, contribution and related causes of action. It is all for naught. Camarillo fails to respond to NMH’s complaint, and a default is entered against Camarillo.

Chapter 2 – The Insurance Company of the State of Pennsylvania (“ICSP”) Sues ASIC

Meanwhile, the Moghadams proceed to arbitration against NMH, winning a judgment of nearly $1.2 million against NMH. In turn, based on the judgment awarded to the Moghadams, NHM obtains a default judgment against Camarillo of more than $1.5 million. But without a defendant able to pay, it’s ICSP that is on the hook to pay the Moghadams.

ICSP later files suit against ASIC, alleging causes of action for declaratory relief, subrogation, breach of contract, and recovery under Insurance Code section 11580, on the ground that it is entitled to recover the amount of the default judgment entered against Camarillo from ASIC.

Both ICSP and ASIC file competing motions for summary judgment. After the dust settles, ICSP rises as the victor. But, as is the case with every story about litigation, the vanquished is always given a second chance to prevail, by way of an appeal.

Chapter 3- The Court of Appeal Decision

On appeal, ASIC made four arguments:

  1. ICSP is barred from recovering under Insurance Code Section 11580 because NMH’s default judgment against Camarillo is void since it didn’t include a specific claim for damages

ASIC’s first argument on appeal was that ICSP’s claim under Insurance Code Section 11580 was barred. Section 11580 provides in pertinent part that “whenever judgment is secured against the insured . . . in an action based upon bodily injury, death or property damage, then an action may be brought against the insurer on the policy and subject to its terms and limitations, by such judgment creditor to recover on the judgment.”

However, Civil Code Section 580 provides that relief granted to a plaintiff in a default judgment “cannot exceed that demanded in the complaint” and any such judgment is void.

ASIC’s argument was that because NMH’s complaint against Camarillo did not specify a dollar amount it was seeking from Camarillo, NMH’s default judgment against Camarillo in the amount of $1.5 million was void. Of course, practically, it could not specify an amount, since NMH did not know if or in what amount a judgment would be entered against it in the arbitration filed by the Moghadams against NMH. Further, ASIC argued, since NMH’s default judgment was void, ICSP as NMH’s insurer did not have a judgment by which it could recover against ASIC under Insurance Code Section 11580.

The Court of Appeals, focusing on whether ASIC had notice of its potential liability, noted that while NMH did not specify a dollar amount it was seeking from Camarillo, NMH did attach a copy of the Moghadams arbitration claim, which sought to recover at least “$2,347,592” in damages. Thus, held the court, the allegations contained in the Moghadam’s arbitration claim “were more than adequate to put Camarillo on ‘formal notice’ of the ‘maximum judgment that may be asserted against [it],’ as required by due process.”

2. ICSP is barred from recovering under Insurance Code Section 11580 because the Moghadam’s judgment against NMH was not based upon property damage, and therefore, was not a covered claim under the insurance policy issued by ASIC

In the arbitration between the Moghadams and NMH the arbitrator awarded the Moghadams $1.2 million measured by the diminution in value of their home as a result of the soil conditions.

ASIC’s second argument was that because the Moghadams were awarded $1.2 million as measured by the diminution in value of their home, the judgment was not “based upon . . .  property damage.” Because Insurance Code Section 11580 limits recovery “subject to [the] terms and limitations” of the defending insurer’s policy, ICSP was not entitled to recovery against ASIC, since only property damage (as well as personal injury) were covered under its policy.

The Court of Appeals disagreed.

First, held the court, “NMH’s action against Camarillo for indemnity was plainly “based upon . . . property damage.”

Second, the court held that “the fact that the arbitrator measured the damages by diminution of value, rather than by the cost of repair, changes nothing. In statutory actions for construction defects, the homeowner’s ‘right to the reasonable value of repairing any nonconformity is limited to the repair costs, or the diminution in current value of the home caused by the nonconformist, whichever is less.”

Third, addressing the difference between the Moghadam’s judgment against NMH ($1.2 million) and NMH’s judgment  against Camarillo ($1.5 million), which reflected NMH’s attorney’s fees in its action against Camarillo, the court explained that “the statute on its face does not require every element of the damages in that judgment to be property damage; it requires the judgment to be ‘in an action based upon . . . property damage.’”

3. ICSP is barred from recovering under Insurance Code Section 11580 because the Moghadam’s failed to show when their property was damaged and ASIC’s policy only covers property damage occurring at the time the policy was in effect

ASIC’s third argument was that the Moghadam’s failed to show when their property was damaged, and because ASIC’s policy only covers property damage occurring at the time the policy was in effect, ICSP was barred from recovering under Insurance Code Section 11580.

ASIC issued several policies to Camarillo. However, the policy at issue contained language stating that, while ASIC was covering property damage “‘Property damage’ . . . which commenced prior to the effective date of this insurance will be deemed to have happened in its entirety prior to, and not during, the term of the insurance.” In other words, the policy would only be triggered if property damage “first occurred” during the policy period.

ASIC’s argument was that the Moghadams had not shown when the property damage first occurred, and therefore, unless the Moghadams showed that property damage first occurred during the policy term, there was no coverage.

The Court of Appeal disagreed, holding that it is a “settled rule” that “an insurer on the risk when continuous or progressively deteriorating damage or injury first manifests itself remains obligated to indemnify the insured for the entirety of the ensuing damage or injury.” In other words, while the Court didn’t expressly say it in so many words, ASIC’s policy was contrary to public policy.

4. ICSP is barred from recovering under Insurance Code Section 11580 because Camarillo didn’t satisfy its self-insured retention

ASIC’s fourth and final argument was that Camarillo didn’t satisfy it’s self-insured retention, which ranged from $15,000 to $50,000, depending on the type of claim, ASIC further stated that because the payment of self-insured retention was a condition precedent of coverage, no coverage existed and no claim could be made by ICSP under Insurance Code Section 11580. I’ve got to hand it to ASIC’s attorneys for creativity.

The Court of Appeals again disagreed, but this time, didn’t need to rely on a public policy argument. The policy language in question specifically stated that no coverage would be provided if ASIC requested that Camarillo pay its self-insured retention and Camillo failed to do so. There was no evidence, explained the Court, that ASIC ever requested that Camillo pay its self-insured retention. Thus, held the Court, ASIC’s reliance on the language as a defense to ICSP’s claim under Insurance Code Section 15580 was moot.

ASIC made other additional arguments as well, but because they weren’t raised during the underlying summary judgment motion,  the Court held that these arguments were “not before the court.”


The Insurance Company of State of Pennsylvania case is an interesting one, involving a statute I wasn’t intimately familiar with, and some creative defenses. When I asked my colleague Gary Barrera, an insurance attorney at the firm, he said, “Well, we could see the foreshadowing of that ending a mile away!” The moral of the story?  I’m glad I’m not an insurance claims attorney.

Construction Law Practice Tip: Determining the Scope of a Subrogation Waiver

Pierre Grosdidier | Haynes and Boone LLP | February 27, 2019

In Exxon Mobil Corp. v. Insurance Company of the State of Pennsylvania, the Texas Supreme Court opined once again on the issue of the extent to which an insurance provision incorporates the terms of an extrinsic contract.[1] The insurance provision in this case was a standard Texas Department of Insurance Form WC 42 03 04 A waiver of subrogation endorsement, but Exxon Mobil’s holding is valid for any insurance provision, including additional insured provisions, that incorporates terms of an extrinsic contract.

An employee of contractor Savage Refinery Services suffered an injury in an Exxon Mobil refinery (Figure). The employee received benefits from The Insurance Company of the State of Pennsylvania, Savage’s workers’ compensation carrier (“Carrier”) and sued Exxon Mobil in a third-party over action. The employee settled with Exxon Mobil and the latter sued the Carrier to secure a declaration that the Carrier had waived its subrogation rights in a Form WC 42 03 04 A endorsement to Savage’s workers’ compensation policy.[2] Absent a waiver, the Carrier’s subrogation rights grant it a “first money” right to any payment by a third-party (here, Exxon Mobil) to an employee who received benefits from the Carrier.[3] It is not unusual in a construction project that a workers’ compensation carrier waives its subrogation rights in exchange for a policy premium.[4] Personal injury lawsuits allegedly settle more easily and for less in the absence of subrogation rights.[5] And, from the carrier’s perspective, the increased premium buys one less dispute to litigate.

By its terms, the endorsement waived the Carrier’s subrogation rights relative to the party named in the endorsement’s Schedule (the “who”); “‘with respect to bodily injury arising out of the operations described in the Schedule,’” (the “what”); and where the named insured (here, Savage) was “required by a written contract to obtain th[e] waiver” (the “where”).[6] The Schedule did not expressly name Exxon Mobil. The incompleteness of the waiver meant that the Court also had to examine the terms of the parties’ Service Contract.

In their Service Contract, Exxon Mobil and Savage agreed to indemnify each other only for their own negligence, and Savage agreed to waive “‘all rights of subrogation and/or contribution against [Exxon Mobil] . . . to the extent liabilities are assumed by [Savage].’”[7] Therefore, Savage had no obligation to indemnify Exxon Mobil for claims that arose from Exxon Mobil’s tortious conduct. The key question was whether this limitation on Savage’s indemnity obligation conditioned its waiver of subrogation.

The Court held that the scope of the endorsement (like that of any insurance policy) was first determined from its four corners. If the endorsement or policy pointed to an extrinsic document, that document would be referred to only “‘to the extent required by the policy,’” that is, in this case, the endorsement.[8] 

Savage’s endorsement specified the “what” (bodily injury) and required a referral to the parties’ Service Contract to determine the “who” and the “where.” The Service Contract defined the “who” as Exxon Mobil, and the “where” as “‘operations [in Texas] where [Savage is] required by a written contract to obtain th[e] waiver from [the Carrier].’” The endorsement did not require any further inquiry and, therefore, imposed no qualifier on 2 whether Exxon Mobil or Savage was ultimately responsible for the injury. For this reason, the Court upheld the validity of the subrogation waiver as to the injured employee’s claim.[9] 

The Court contrasted the facts and its analysis in Exxon Mobil with those in, inter alia, Deepwater Horizon. [10] In that case, various BP entities, acting as operator, sought coverage as an additional insured under various insurance policies held by Transocean entities, the drilling contractor. As the Court explained, the insurance policies

at issue in Deepwater Horizon extended “insured” status to “[a]ny person or entity to whom the ‘Insured’ is obliged by oral or written ‘Insured Contract’ … to provide insurance such as afforded by [the] Policy.” The policies defined an “Insured Contract” as “any written or oral contract or agreement entered into by the ‘Insured’ … and pertaining to business under which the ‘Insured’ assumes the tort liability of another party to pay for ‘Bodily Injury’ [or] ‘Property Damage’ … to a ‘Third Party’ or organization.[11] 

The crucial difference between the two cases, therefore, was the location of the assumption of liability qualifier. In Exxon Mobil, the qualifier was in the Service Contract, and there was no need to reach it to circumscribe the scope of the subrogation waiver. The consequence was that the Exxon Mobil waiver was valid regardless of which party caused the employee’s injury. Conversely, in Deepwater Horizon, the qualifier was in the insurance policy and had to be factored into the scope of the additional insured provision. In that case, BP was an additional insured with respect to above-surface pollution, for which Transocean had assumed liability, but not with respect to below-surface pollution, for which the driller had not.[12]