No Duty to Defend If Insurer Not Asked to Insure Against the Risk of Loss to Property

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While renovating a historic Masonic Temple in Quincy, Massachusetts, workers sparked a fire that nearly burned the structure to the ground. At the time of the fire. Jay Patel, the president and sole owner of Dipika, Inc. (Dipika), was holder of a purchase and sale agreement to buy the Temple.

In Masonic Temple Association Of Quincy, Inc. v. Jay Patel, No. SJC-13109, Supreme Judicial Court of Massachusetts, Norfolk (April 27, 2022) resolved the dispute.

BACKGROUND

The Masons requested that Patel provide them with proof of insurance who contacted Roblin Insurance Agency, Inc. (Roblin). On July 25, 201. Roblin responded to Patel’s e-mail message within one-half hour, transmitting a certificate of insurance for Dipika’s current policy.

The Fire

Several months later, two workers were on site, cutting metal, when a fire broke out. Shortly after the fire, Patel notified Union and requested coverage under the Dipika policy only to have it refused since the fire was not at the motel.

The ordinary understanding of the phrase “doing business as Super 8” suggests that the policy covers only liability arising from Dipika’s activities that it undertakes doing business as a Super 8.

CLAIMS AGAINST ROBLIN

Dipika insists that, should it be unable to recover from Union, its losses should instead fall upon Roblin. All Dipika’s claims against Roblin, however, suffer from the same fundamental flaw: they are all premised on Patel requesting additional insurance for Dipika from Roblin. In the context of a liability policy like Dipika’s, a certificate of insurance is simply a form that is completed by an insurance broker or agent at the request of a policyholder to document the fact that an insurance policy has been written. The one-page certificate states “This Certificate Is Issued As A Matter Of Information Only And Confers No Rights Upon The Certificate Holder…”

Summary judgment was properly entered in favor of Union and Roblin.

ZALMA OPINION

A professional like Mr. Patel, who owned and operated several commercial properties should have understood the need to insure against the risks he faced in the remodeling of a structure and the need of the seller for evidence that he had insurance.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].

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