November 2025 New York Insurance Coverage Update

Eastern District Finds Ongoing Operations Exclusion Is Unambiguous And Precludes Coverage For Worker’s Lawsuit

Steven Rodriguez owns property in Queens and leased one of the storefronts to a restaurant. Without Rodriguez’s permission, the restaurant hired a company to change the signage and awning in front of its storefront. A worker was injured when he fell from a ladder while cleaning the newly installed awning. The worker filed a lawsuit against Rodriguez and Rodriguez sought coverage for the lawsuit from Union Mutual Fire Insurance Company, his general liability insurer. Union Mutual denied a duty to defend or to indemnify Rodriguez in the lawsuit based upon an Independent Contractor/Subcontractor Exclusion and an Ongoing Operations Exclusion. Union Mutual filed a declaratory judgment action seeking a declaration of no coverage and the parties filed cross-motions for summary judgment. The Eastern District of New York denied Rodriguez’s motion and granted Union Mutual’s motion, finding that the Ongoing Operations Exclusion applies to preclude coverage for the worker’s lawsuit. The exclusion precludes coverage for “[a]ny construction, renovation or repair work being performed at any insured location, except when performed by independent contractors and/or subcontractors who have met [certain] conditions …,” which include maintaining insurance with limits at least equal to the Union Mutual policy limit and naming Rodriguez as an additional insured on such insurance. The court rejected Rodriguez’s argument that “the phrase ‘construction, renovation, or repair’ is ambiguous because the Policy does not define it.” The court explained that it is the “common practice of New York courts to refer to dictionaries to determine the plain and ordinary meaning of the words in a contract” that are not defined. Because the terms of the exclusion are “clear and unambiguous,” the court rejected Rodriguez’s argument that Union Mutual’s underwriting guidelines should govern the interpretation of the policy. The court found that the injured worker “participated in a process that restored the awning (and its cover) to a ‘good state’ and to ‘newness of appearance’” and those “activities plainly fall within the dictionary definitions of ‘renovate’ and/or ‘repair’.” Further, the court found that the exception to the exclusion does not apply because there is no evidence that the awning company satisfied the insurance conditions. [Union Mut. Fire Ins. Co. v. Rogriguez, No. 22-cv-6322 (EK)(JRC), 2025 U.S. Dist. LEXIS 193523 (E.D.N.Y. Sept. 30, 2025).]

First Department Finds Insurer Has No Obligation To Cover Fire Damage to Insured’s Building That Did Not Qualify As A “Residence Premises”

Gregory Simms owns a residential building in Brooklyn. The building sustained damage from a fire and Simms sought coverage for the damage under a homeowners policy covering the building that was issued by Liberty Insurance Corporation. Liberty denied coverage on the basis that the building does not qualify as a “residence premises,” as defined by the policy. Simms filed an action against Liberty for breach of contract and a declaration that the building conformed to the policy definition of “residence premises.” Simms filed a motion to dismiss one of Liberty’s affirmative defenses and Liberty cross-moved for summary judgment seeking a declaration of no coverage and dismissal of Simms’s complaint. The Supreme Court denied Liberty’s motion, Liberty moved to reargue, and, upon reargument, the Supreme Court again denied Liberty’s motion. Liberty appealed and the Appellate Division, First Department, reversed. The First Department acknowledged that insurance policies should be construed liberally in favor of coverage but found that the Liberty policy “unequivocally limited coverage to losses incurred on the ‘residence premises,’ which was defined, in relevant part, as a one-, two-, three-, or four-family dwelling.” The court found that Simms’s building “was configured as a five- or six-family dwelling,” and, thus, it “did not conform to the definition of ‘residence premises’ contained in the insurance policy” and Liberty’s “denial of coverage was proper.” [Simms v. Liberty Ins. Corp., 2025 NY Slip Op 05271, 2025 N.Y. App. Div. LEXIS 5320 (1st Dep’t Oct. 1, 2025)].