New York Insurance Coverage Law Update

Fourth Department Holds Landlord Covered As Additional Insured Under Tenant’s Policy For Accident On Driveway Of Leased Premises

Technology Insurance Company, as the liability insurer for a landlord, filed a declaratory judgment action against Main Street America Assurance Company, as the liability insurer for the landlord’s tenant, seeking a declaration that Main Street had a duty to defend and to indemnify the landlord as an additional insured in an underlying personal injury action filed by a patron of the leased premises, a barbershop. In the underlying action, the patron alleged that he tripped and fell on a snow-covered hole in the driveway of the premises while walking from the barbershop to his vehicle.  The New York Supreme Court, Appellate Division, Fourth Department, held that the landlord was entitled to a defense and indemnity under the tenant’s policy, which provided additional insured coverage to the landlord for “liability arising out of the ownership, maintenance or use of that part of the premises leased to” the tenant.   The court stressed that the driveway was “necessarily used for access in and out of” the barbershop and, therefore, was “included in the scope of the leased premises.”   The court also rejected Main Street’s argument that its policy is “excess” to other insurance that insures for “direct physical loss or damage.”  The court found that this “other insurance” provision refers to property damage claims, not bodily injury claims like those at issue. [Technology Ins. Co., Inc. v. Main St. Am. Assur. Co., 2022 N.Y. App. Div. LEXIS 774 (4th Dep’t Feb. 4, 2022).]

Court Finds Accident Not Covered Under Auto Policy Because Not Incidental To The Unloading Of The Vehicle

Wesco Insurance Company filed a declaratory judgment action seeking a declaration that it had no duty to defend or to indemnity various defendants in an underlying personal injury action filed by Manuel Velasquez who was allegedly injured while carrying a window panel from his truck to a jobsite when he tripped on an uneven, rutted, pitted, rocky and unstable portion of the ground.  The court held that the accident did not result from the ownership, maintenance or use of the truck as necessary to trigger Wesco’s auto policy.  The court acknowledged that the “use” of a vehicle under an auto policy may include “not only the immediate transference of the goods to or from the vehicle, but the ‘complete operation’ of transporting the goods between the vehicle and the place from or to which they are being delivered.” However, based upon the claimant’s allegations and testimony, the court determined that the accident related to the condition of the construction site, not any negligence incidental to the unloading process.  [Wesco Ins. Co. v. James River Ins. Co., 2022 N.Y. Misc. LEXIS 347 (Sup. Ct. N.Y. Cnty Jan. 3, 2022).]

District Court Holds That Putative Additional Insureds’ Third-Party Complaint And Crossclaims Against Named Insured Did Not Trigger Additional Insured Coverage

A claimant sued Old Slip Property, LLC for injuries she suffered when a glass panel detached and fell on her while she was cleaning a revolving glass door on the 15th floor of a building owned by Old Slip (owner).  The owner brought a third-party action against claimant’s employer, PBM, alleging that PBM negligently caused the accident.  The owner also brought a third-party action against the tenant of the 15th floor, which cross-claimed against PBM.  The owner and tenant both sought additional insured coverage under PBM’s policy, which covered them as additional insureds for liability “caused, in whole or in part, by” PBM’s “acts or omissions.”  They argued that the tenant’s crossclaims and owner’s third-party complaint against PBM triggered a duty to defend because they allege that PBM negligently caused the accident in that claimant failed to look for defects or was cleaning the door in an unsafe manner.  The United States District Court for the Southern District of New York noted that “[i]t is true that ‘a duty to defend has been based on … allegations in third party complaints alleging negligence and seeking indemnification and contribution from the named insured.’”  However, the court concluded that the claims at issue did not give rise to a duty to defend because when “peel[ed] back” the “pleadings simply show that PBM, at most, ‘merely furnished the occasion for the injury.’” [LM Ins. Corp. v. Fed. Ins. Co., 2022 U.S. Dist. LEXIS 27120 (S.D.N.Y. Feb 15, 2022).]