Source: http://www.businessinsurance.com, June 30, 2016
By: Judy Greenwald

Hartford Financial Services Group Inc. units are obligated to indemnify an engineering company in connection with an industrial accident at a nuclear power plant that killed one worker and injured several others, says a federal appeals court, in partially reversing a lower court ruling.

The U.S. Court of Appeals for the 5th Circuit in New Orleans, however, upheld a ruling by the U.S. District Court in Fort Worth, Texas that the Hartford units had no duty to defend Fort Worth-based DP Engineering L.L.C., according to Wednesday’s ruling in Hartford Casualty Insurance Co. et al. v. DP Engineering L.L.C. et al..

DP Engineering, which had entered into an agreement to provide engineering services for a Russellville, Arkansas, nuclear power plant operated by New Orleans-based Entergy Corp., had primary insurance policies with two Hartford units, and an umbrella policy with one of the units, according to court papers.

All three policies contained a coverage exclusion for injuries or damages arising out of DP Engineering’s professional services.

In March 2013, Entergy needed to move and refurbish a “stator”, which is a cylindrical 520-ton component of the electricity generation system, according to the ruling.

The stator was secured to a gantry, and at some point in the procedure, the gantry collapsed, killing one worker and injuring others, according to court papers. Five lawsuits were subsequently filed in the incident.

The Hartford units sought a declaratory judgment that they had no duty to defend or indemnify their policies because of the coverage exclusion for professional services, and the district court granted them summary judgment dismissing the case.

A three-judge appellate court panel unanimously overturned the indemnification ruling, holding that the accident could have been the result of non-professional services. “The underlying lawsuits here involve complex facts and multiple allegedly negligent parties,” the ruling reads.

“The factual allegations do not negate any possibility that Hartford will ever have a duty to indemnify, because as DP Engineering argues, there is an ‘array of possible factual and legal scenarios’ that could have caused the crane and stator to fall, some of which may create coverage.

“The allegations in the underlying lawsuits here do not conclusively foreclose that facts adduced at trial may show DP Engineering also provided nonprofessional services, which could be covered under the policy,” said the ruling, in remanding the case to the lower court.

The appeals court affirmed the lower court ruling that the Hartford units had no duty to defend DP Engineering because of the policies’ professional services exclusion.