A new Oregon case, Security Nat. Ins. Co. v. Sunset Presbyterian Church, 289 Or App 193 (Dec. 6, 2017), holds that a subcontractor’s insurer is not obligated to pay all of a general contractor’s defense costs in an additional insured setting, but only those costs that relate to claims against that subcontractor:
In our prior decision, we determined that the “defend-one – defend-all” principle of insurance, when applied to contracts of indemnity, was limited by ORS 30.140, such that the contract of indemnity could require the indemnitor to defend only the indemnitee’s potential liability for the indemnitor’s fault. Sunset Presbyterian, 268 Or at 322. In Walsh Construction, the court determined that ORS 30.140 limits insurance policies as it limits indemnity contracts. We conclude, therefore, that ORS 30.140 circumscribes the insurer’s duty to defend just as it circumscribes the indemnitor’s duty to defend. Accordingly, SNIC’s [subcontractor’s insurer] duty to defend under its policy does not extend to defend all claims; rather, SNIC’s [subcontractor’s insurer] duty to defend corresponds to Andersen’s [general contractor] potential liability that arises out of the fault of B&B [subcontractor].