Endorsement-Extended Insured Status and Co-Excess Coverage: County of Ulster v. Alliance of Nonprofits for Insurance Risk Retention Group

Introduction

County of Ulster v. Alliance of Nonprofits for Insurance Risk Retention Group (No. 24-1598, 2d Cir. Apr. 7, 2025) arises from a tragic collision in January 2018. Barbara Hyde, driving a private vehicle under the County’s Senior Transportation Program, collided head-on with a County-owned bus, resulting in Hyde’s death and injury to her passenger, Joyce Northacker. Northacker sued the County and others in state court. Thereafter the County sought a federal declaratory judgment that Alliance of Nonprofits for Insurance Risk Retention Group (“ANI”) must cover the County’s liability under a volunteer-driver endorsement in ANI’s policy; ANI counterclaimed that it does not owe coverage. The key issues on appeal to the Second Circuit were:

Whether the County of Ulster qualifies as an “insured” under the ANI volunteer-driver endorsement;
Whether the ANI policy is primary or co-excess relative to the County’s separate municipal insurance policy (NYMIR).

Parties:

Plaintiffs/Appellees: County of Ulster; New York State Local Government Services Foundation, Inc.; New York Municipal Insurance Reciprocal
Defendant/Appellant: Alliance of Nonprofits for Insurance Risk Retention Group

Summary of the Judgment

The Second Circuit affirmed in part and vacated in part the district court’s summary-judgment ruling. It held (1) that under the volunteer-driver endorsement and the unambiguous JFS–County “Agreement for Professional Services,” Hyde was a volunteer of Jewish Family Services (“JFS”) and therefore an “insured” under the ANI policy, and the County in turn was an “insured” by virtue of liability for Hyde’s conduct; and (2) that because the County is an insured by endorsement rather than by “assumption of liability” under an “insured contract,” the ANI policy and the NYMIR policy share coverage on a co-excess basis rather than giving primary priority to ANI.

Analysis

Precedents Cited

Byrne v. Rutledge, 623 F.3d 46 (2d Cir. 2010) – standard of review for summary judgment.
Goldman v. White Plains Center for Nursing Care, 896 N.Y.2d 173 (2008) – interpreting clear, unambiguous written agreements.
EMF General Contracting Corp. v. Bisbee, 6 A.D.3d 45 (N.Y. App. Div. 1st Dep’t 2004) – requirements for contract abandonment by conduct.
Aliperti v. Laurel Links, Ltd., 27 A.D.3d 675 (N.Y. App. Div. 2d Dep’t 2006) – mutual conduct inconsistent with contractual intent.
Sport Rock Intl., Inc. v. American Cas. Co. of Reading, Pa., 65 A.D.3d 12 (N.Y. App. Div. 1st Dep’t 2009) – priority/allocation under competing “other insurance” clauses.

Legal Reasoning

1. Insured Status by Endorsement. The ANI Business Auto Coverage insures “all sums an ‘insured’ must pay” for covered accidents. A volunteer-driver endorsement expands “Who is an insured” to include “anyone volunteering services to [JFS] . . . while using a covered auto to transport [JFS] clients.” The Agreement assigned recruitment, training, licensing and insurance of drivers to JFS and repeatedly labels them as “Agency’s volunteers.” The court applied basic contract-interpretation principles to hold the Agreement unambiguous: Hyde was a JFS volunteer and thus an insured, and the County in turn became an insured by subsection (c) of the policy, which covers anyone “liable for the conduct of an insured described above.”

2. Priority of Coverage. Both the ANI and NYMIR policies contained near-identical “other insurance” provisions, but ANI’s policy gives primary status only to liability “assumed under an ‘insured contract’.” The court explained that although the underlying JFS–County agreement contains an indemnification clause, the County’s status as an insured arises directly from the policy endorsement—not from assumption of contractual liability. Accordingly, no primary-insured-contract exception applies, and the policies stand on equal footing as co-excess coverage.

Impact

This decision clarifies two points of practical importance:

Endorsements that expressly expand “Who is an insured” will bind multiple layers of coverage, including principals of volunteers.
Allocation among competing policies turns on the precise trigger language of “other insurance” clauses—municipalities and nonprofits must carefully review endorsements and insured-contract triggers to anticipate primary/excess obligations.

Future litigants will look to this case when negotiating volunteer-driver programs, structuring indemnification provisions, and drafting umbrella or RRG policies to ensure desired priority of coverage.

Complex Concepts Simplified

Risk Retention Group (RRG): A specialized insurance entity allowing like-minded organizations to pool risks and self-insure under federal supervision.
Summary Order: A non-precedential appellate decision resolving an appeal without a full, published opinion.
Other Insurance Clause: Policy language directing how multiple policies share coverage (primary, excess, pro rata, etc.).
Insured Contract vs. Endorsement: “Insured contract” triggers primary status when liability is contractually assumed; an “endorsement” directly defines who qualifies as an insured.
Contract Abandonment by Conduct: Requires mutual, unequivocal acts inconsistent with remaining bound by the agreement.

Conclusion

County of Ulster v. Alliance of Nonprofits establishes that volunteer-driver endorsements can extend insured status both to volunteers and to principals who may be vicariously liable. It also demonstrates that policy priority depends strictly on “other insurance” language: an insured-status endorsement does not equate to an “insured contract” assumption, resulting in co-excess coverage rather than primary allocation. This ruling will guide municipalities, nonprofits, risk retention groups, and insurers as they structure volunteer programs and draft layered liability policies.