New York Insurance Coverage Law Update – April 2022 | Rivkin Radler LLP

The second department keeps the landlord covered as an additional insured under the tenant’s policy when the tenant’s employee was injured in the freight elevator used by the tenant

Bed Bath & Beyond rented retail and office space on the third floor of a Queens mall, and its employee was injured while using a freight elevator while on the job. The employee sued the mall owner, who requested additional insured coverage under the Bed Bath & Beyond policy from Safety National Casualty. The policy provided additional insured coverage to the landlord for liability arising from the ownership, maintenance or use of the leased premises. The New York, Second Department, Appellate Division ruled that Safety National Casualty should defend and indemnify the landlord as an additional insured, finding that the leased premises necessarily included “the elevator in question, which was used by Bed Bath & Beyond during its activity to give it access to the rented places. [Alexander’s Rego Shopping Ctr., Inc. v. Safety Nat’l Cas. Corp., 158 N.Y.S.3d 839 (2d Dep’t Feb. 9, 2022).]

District court finds Polar Bear Club not covered for participant accident

The Polar Bear Club holds an annual charity event called “Polar Bear Plunge” where thousands of people enter the ocean in mid-winter to raise money for the Make-A-Wish-Foundation. The Polar Bear Club asks those wishing to participate to register and submit a disclaimer agreement. The plaintiff was allegedly injured when he joined others in entering the ocean at Long Beach, New York, and sued Long Beach and the Polar Bear Club. They in turn bid on their insurer, Scottsdale Insurance, who declined coverage on the grounds that their policy excluded bodily injury coverage to a “participant”, defined to include anyone “taking part” in the event. The Polar Bear Club and Long Beach argued that the exclusion was ambiguous as to who is a “participant” and should not include the claimant who did not officially register for the event or did not sign disclaimer agreement. The United States District Court for the Eastern District of New York disagreed, noting that “a contract is not ambiguous simply because one of the parties attaches a different subjective meaning to the one of its terms”. Instead, to be ambiguous, a policy “must be reasonably interpreted in two conflicting ways when considered objectively by a reasonably intelligent person who has considered the context of the entire integrated agreement.” The court also rejected the argument that the policy was delusional, holding that it “provides cover for certain acts and events, namely the bodily injuries of spectators and participants in the Polar Bear Plunge”, and the fact that there may be “broad exclusions” that do not make a policy “illusory”. [Scottsdale Ins. Co. v. Long Beach Polar Bear Club City of Long Beach, 2022 U.S. Dist. LEXIS 55936 (E.D.N.Y. Mar. 18, 2022).]

The first department holds the insured entitled to coverage under the embezzlement bonds for the loss suffered due to the broker

Commodity futures broker MF Global brought in an outside broker who was trading commodity futures on the Chicago Mercantile Exchange (CME) beyond its available line of credit. As a clearing member of the CME, MF Global was required to meet the broker’s payment obligations and recorded the loss on its books as a bad debt. In turn, MF Global applied for cover under its Loyalty Bond Insurance Policy and Excess Bonds, which covered MF Global’s “direct” financial loss as a result of any theft, fraudulent act or malicious act committed by “any other person” and excluded loss of contractual liability. . MF Global sued its insurers for coverage and the New York First Department Appellate Division found that MF Global was covered because, among other things, MF Global’s loss was “direct” and not cannot properly be regarded as merely satisfying a contractual liability to the CME. [New Hampshire Ins. Co. v. MF Global Fin. USA Inc., 2022 N.Y. App. Div. LEXIS 1763 (1st Dep’t Mar. 17, 20220.]

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