United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

FILED December 14, 2021 No. 20-50966 Lyle W. Cayce Clerk

Zurich American Insurance Company,

Plaintiff—Appellant,

versus

Arch Insurance Company,

Defendant—Appellee.

Appeal from the United States District Court for the Western District of Texas USDC No. 1:19-cv-24

Before Davis, Haynes, and Oldham, Circuit Judges. Andrew S. Oldham, Circuit Judge: This appeal arises from a highway construction project gone wrong. The question presented is whether the issuer of a commercial general liability policy, Arch Insurance Company, has a duty to defend the project’s general contractor. The district court answered no. We disagree and reverse. I. A. SH 130 Concession Company, LLC (“Developer”) holds a concession to design and construct a 41-mile stretch of highway (“Project”) Case: 20-50966 Document: 00516131058 Page: 2 Date Filed: 12/14/2021

No. 20-50966

running from Mustang Ridge to the I-10 connector near Seguin, Texas. The Developer hired Central Texas Highway Constructors, LLC (“CTHC”) as the Project’s general contractor. CTHC in turn hired Archer Western Contractors, Ltd. (“Archer Western”), among others, as a subcontractor. As most relevant here, Archer Western agreed to construct certain drainage systems for the Project. Archer Western obtained annual commercial general liability (“CGL”) policies from Arch Insurance Company (“Arch”) that were effective from June 1, 2009, through June 1, 2018 (collectively, “Policy”). In the Policy, Arch assumed both a duty to indemnify and a duty to defend. As to the duty to indemnify, the Policy provides: “[Arch] will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” As to the duty to defend, the Policy states: “[Arch] will have the right and duty to defend the insured against any ‘suit’ seeking those damages. However, [Arch] will have no duty to defend the insured against any ‘suit’ seeking damages for ‘bodily injury’ or ‘property damage’ to which this insurance does not apply.” This case involves only Arch’s duty to defend. The subcontract required Archer Western to name CTHC as an “additional insured” on its Policy. Archer Western did so with two endorsements. First, the “Completed Operations Endorsement” extends coverage to the “additional insured [CTHC] . . . with respect to liability for ‘bodily injury’ or ‘property damage’ caused, in whole or in part by, ‘your work’ [Archer Western’s] at the location designated . . . performed for that additional insured [CTHC].” Second, the “Ongoing Operations Endorsement” extends coverage under the Policy to the “additional insured [CTHC] . . . with respect to liability for ‘bodily injury’, ‘property damage’ or ‘personal and advertising injury’ caused, in whole or in part, by . . . [Archer Western’s] acts or omissions . . . in the performance of [its] ongoing