The Eternal Dispute of the Status of Additional Insured
An insurance broker and a building management company (Dovan) were sued by a property named Parkview that suffered a fire loss, for inadequate insurance for the fire loss. Parkview alleged gross negligence in Dovan’s alleged failure to review the relevant policy. Dovan Management Group LLC v. AmGuard Insurance Company, 2023 WL 5216635 (N.J. Super. Ct. App. Div. Aug. 15, 2023). Dovan in turn filed a separate claim against Parkview’s insurance company AmGuard, attempting to claim that in one provision of the management agreement, Parkview was required to name Dovan as an additional insured. AmGuard refused to accept Dovan’s tender by denying Dovan’s additional insured status under the policy. AmGuard relied on the exclusionary language in the policy endorsement that expressly excluded the underlying claims and claimed that Dovan even lacked standing in bringing the action. In general, policy exclusions have to clear, specific and unambiguous in order to be enforceable. And this is one of the cases where the policy language was not subject to multiple interpretations. The appellate court ruled that even if Dovan was considered an additional insured under the policy, the business liability section of the exclusion applies. The business liability exclusion excluded Dovan’s costs incurred in defending the underlying action since the claim was related to the property damage arising from Dovan’s contractual obligation with Parkview to review and recommend the appropriate amount of insurance. AmGuard successfully defended itself by implementing specific and unambiguous language into the policy. Thanks to Yifan Lin for her contribution to this article.
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