The Power Authority was an additional insured on a policy issued by National Union, pursuant to an endorsement which referenced an agreement between the Power Authority and one of its contractors, Burns Roe Enterprises. The policy provided for a $250,000 self-insured retention. When one of Burns Roe's employees was injured, the Power Authority demanded coverage from National Union, but it declined on the ground that the agreement between the Authority and Burns Roe only required coverage for actions arising out of Burns Roe's operations. National Union claimed that the plaintiff in the underlying action was injured while performing work under the supervision of the Authority, and, hence, coverage was not implicated. Eventually, the Power Authority settled the claim for approximately $200,000, inclusive of legal fees. When it demanded indemnification from National Union, the insurer disclaimed on the ground that there was a $250,000 self-insured retention.
The Authority argues that the self-insured retention issue was not raised previously and hence cannot constitute a ground for declining coverage. A reading of the policy makes clear that the self-insured retention was contained in an endorsement, and that the retention applied to all coverage, including that afforded the additional insured (cf. Am. Ref-Fuel Co. of Hempstead v. Resource Recycling, Inc., 248 A.D.2d 420, 424). Thus, the time requirements for disclaiming coverage under Insurance Law § 3420(d) are inapplicable; since the retention amount does not implicate exclusions in the policy (see Berger v. Pub. Serv. Mut. Co., 177 A.D.2d 280). Nothing in the record supports the Authority's veiled suggestion that it did not receive a copy of the policy.
Nor do we find any prejudice to the Authority by reason of the circumstance that the initial disclaimer was based upon coverage grounds. The disclaimer placed the Authority on sufficient notice to enable it to timely pursue any claim it had against Burns Roe for failure to procure appropriate insurance. Furthermore, the language of the additional endorsement clearly referred to the agreement between the Authority and Burns Roe for purposes of establishing the conduct for which coverage would be provided by National Union to an additional insured.
We modify only to declare in defendants' favor (see Lanza v. Wagner, 11 N.Y.2d 317, 334, appeal dismissed 371 U.S. 74, cert denied 371 U.S. 901).
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.