May 2026 New York Insurance Coverage Update

Southern District Finds Commercial General Liability Policies And Products-Completed Operations Liability Policy All Cover The “Same Risk” For Purposes Of Priority

141 East 88th Street, LLC, was the sponsor and developer for a construction project converting an apartment building into a condominium. 141 East retained Tekton Builders, LLC, to be the general contractor for the project and Tekton subcontracted a portion of the work to Metal and Glass Solutions Putnam LLC. Under its subcontract, M&G was required to procure additional insured coverage for 141 East on a primary basis. After construction was complete and the units were sold, the unit owners formed a condominium board and later discovered defects in the construction work and resulting damage. The board sued 141 East and others. 141 East tendered its defense to Arch Specialty Insurance Company under a products-completed operations liability policy issued to 141 East, which provides that it is excess over other insurance. Arch began paying 141 East’s defense costs in September 2019. 141 East also tendered its defense to Travelers Property Casualty Company of America and its affiliate The Charter Oak Fire Insurance Company as an additional insured under commercial general liability policies issued to M&G. The Travelers policies provide primary additional insured coverage when required by written contract. Travelers agreed to pay 141 East’s defense costs beginning in November 2019 but refused to pay costs incurred before that date. Arch filed an action against Travelers seeking a declaration that coverage for 141 East under the Arch policy is excess over the Travelers policies and Travelers’ duty to defend began in August 2019 when 141 East tendered. In response, Travelers asserted crossclaims seeking a declaration that the Arch policy is primary to the Travelers policies, which are excess, and reimbursement of at least 50% of defense costs paid. Arch and Travelers each filed motions for summary judgment. The Southern District of New York granted Arch’s motion and denied Travelers’ motion. The court found both the Arch policy and the Travelers policies cover 141 East’s “defense in suits for property damage arising from M&G’s work” and, thus, “cover the ‘same risk’ and interest with respect to the duty to defend.” The court explained that, even though the policies “cover different but overlapping periods of time” and the Travelers policies are CGL policies and the Arch policy is a products-completed operations liability policy, neither of these facts “alter the analysis of whether they insure the ‘same risk.’” Because the Arch policy and Travelers policies cover the “same risk,” the court looked to the “other insurance” provisions in the policies to determine priority. The court found that the Travelers policies are primary to the Arch policy and, as such, Travelers has a primary duty to defend 141 East that began on the date of notice in August 2019. [Arch Specialty Ins. Co. v. Travelers Prop. Cas. Co. of Am., et al., 24-CV-7712 (KHP), 2026 WL 1146540 (S.D.N.Y. April 28, 2026).]

Second Department Finds Underwriting File Not Subject To Disclosure Because Policy Is Unambiguous

Plaintiff Steven Lannon was allegedly injured while working on a project for McM Homes, Inc., a subcontractor hired by Bay Creek Builders, LLC, a general contractor. Plaintiff filed an action against Bay Creek and others asserting claims of negligence and Labor Law violations and seeking damages for his alleged injuries. Plaintiff obtained a judgment against Bay Creek after it defaulted. Plaintiff then filed a direct action against Everest National Insurance Company, alleging that McM, Everest’s named insured, was required to add Bay Creek as an additional insured on Everest’s policy. Plaintiff moved to compel Everest to produce the underwriting file for its policy and the unredacted “notes report” for all claims involving Plaintiff. Everest cross-moved for a protective order. The Supreme Court, Suffolk County, denied Plaintiff’s motion and granted Everest’s cross-motion, and Plaintiff appealed. The Appellate Division, Second Department, affirmed, finding Everest’s underwriting file is not relevant and the redacted portions of its “notes report” are privileged. The court explained that, where “an insurance policy is unambiguous, extrinsic evidence of its meaning is not considered.” Plaintiff “failed to demonstrate that disclosure of the underwriting file will result in the disclosure of relevant evidence or that his demand was reasonably calculated to lead to the discovery of information bearing on his cause of action.” [Lannon v. Everest Nat’l Ins. Co., 2026 N.Y. Slip Op. 02259, 2026 N.Y. App. Div. LEXIS 2419 (2d Dep’t April 15, 2026).]