Risk Transferred from Owner to Tenant's Insurer

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The insurer naming Aumick as an additional insured attempted to avoid its obligation to defend or indemnify him in Technology Insurance Company, Inc., As Reinsurer And Successor To Tower National Insurance Company, And Roger S. Aumick v. Main Street America Assurance Company, Defendant-Appellant, Darrius Outling, Doing Business As Krispie Kuts, No. 2022-00798, Supreme Court of New York, Fourth Department (February 4, 2022) only to have the issue resolved by a New York appellate court.

FACTS

In February 2014, a patron of Outling's barbershop tripped on a snow-covered hole in the driveway while walking from the shop to his vehicle. 

THE TRIAL COURT DECISION

The trial court declared that plaintiff Technology Insurance Company, Inc., as reinsurer, and successor to Tower National Insurance Company, was entitled to attorney's fees and declared that the coverage provided by defendant-appellant is primary and non-contributory.

ANALYSIS

In disputes over insurance coverage, the court must look to the language of the policy. The term "'arising out of'" means" 'originating from, incident to, or having connection with'" (Regal Constr. Corp. v National Union Fire Ins. Co. of Pittsburgh, PA, 15 N.Y.3d 34, 38 [2010], quoting Maroney v New York Cent. Mut. Fire Ins. Co., 5 N.Y.3d 467, 472 [2005]). It requires only that there be some causal relationship between the injury and the risk for which coverage is provided.

Construing defendant's policy as a whole the appellate court concluded that the patron's damages arose out of the premises for which Aumick was a named additional insured, and thus defendant's policy provides primary coverage to Aumick, and plaintiff's coverage was excess.

ZALMA OPINION

"Other Insurance" clauses tend to bring about disputes between insurers.  The court required one insurer to be primary and non-contributory and that it was on the hook for the full cost of defense and indemnity up to the limits of the policy.

© 2022 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

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