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NY App. Div.: Insurer May Be Required to Provide Coverage Pursuant to Exclusion Clause in Commercial

April 2, 2010

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In <i>Majawalla v Utica First Insurance Co,</i> the plaintiff’s owned commercial property leased to a convenience store proprietor. A woman allegedly fell in the parking lot of the store and commenced a personal injury action. The owner’s sought coverage from Utica (the tenant’s insurer) who disclaimed because the owner’s were not listed as additional insured’s under the policy. However, the Appellate Division denied Utica’s motion for summary judgment based on language in the commercial liability section of the policy. The policy contained an exclusion that stated Utica would not pay for bodily injury or property damage liability assumed under a contract. However, this exclusion expressly stated it did not apply to an "incidental contract." By including this language, the court found that the lease and policy raised a triable issue of fact as to whether Utica was obligated to defend and indemnify the owners.
Additionally, Utica also disclaimed based on a provision in which that expressly excluded from coverage for parking lots. However, because this provision appeared in the "property coverages" section of the policy, and not the "commercial liability coverages" portion, the policy did not expressly exclude from coverage based on the commercial liability section for incidents occurring in the parking lot.
Special thanks to William K. Kirrane for his contributions to this post.
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