The First Department revived a complaint seeking a declaratory judgment that insurers had no duty to defend or indemnify the Archdiocese of New York in over 1,500 sexual abuse actions enabled by recent revival statutes. The lower court had dismissed based on allegations of negligence in the underlying complaints. Reversing, the First Department concluded that the insurers’ complaint sufficiently alleged the abuse claims fall outside the policies, which generally covered only injury that was “neither expected nor intended from the standpoint of the insured,” by asserting the Archdiocese had longstanding knowledge of the abuse.  The complaint also adequately pleaded a non-cooperation defense.

However, the court affirmed dismissal of the insurers’ “known loss” defense, because the Archdiocese had only known a risk of loss, not an actual loss, when the policies were issued.

The First Department held that the business interruption policy did not cover COVID-19 related losses.  There was no “direct physical loss” which, in New York COVID-19 coverage cases, requires an “actual, discernable, quantifiable change constituting ‘physical’ difference to the property from what it was before exposure to the virus.”  Plaintiffs sought coverage under an Interruption by Civil Authority provision, which provided coverage “when, as a result of a peril . . ., access to the vicinity is restricted by order of civil authority, regardless of whether any property insured by this policy shall have been damaged.”   But this provision did not create coverage for COVID-19 losses resulting from government shutdowns because it, too, required “a risk of direct physical loss” to a property nearby.  Finally, the court declined to extend the “Murder, Suicide and Infectious or Contagious Diseases” coverage extension past its $5 million sublimit, as that would “violate[] basic rules of contract construction.”

The Second Department concluded subcontractor’s insurance, a Harleysville policy, did not cover premises owners as additional insured and was excess to the general contractor’s primary policy.  The Harleysville AI endorsement covered anyone the sub was required to add as AI by “written contract.”  But the owners and the sub had no contract.  Without privity of contract, there was no AI coverage.  It did not matter that the subcontract between the general and the sub incorporated by reference the prime contract between the owners and the general.  Incorporation by reference of the contract between the owners and the general did not create privity between the owners and the sub.

The general, on the other hand, was in privity with the sub and did have AI coverage.  Although the general sought primary coverage, the court determined Harleysville was excess.  Harleysville’s AI coverage was excess “unless a written contract requires that the coverage be primary and noncontributory.”  Since the subcontract did not contain this requirement, Harleysville was excess.  Likewise, because Harleysville was excess, general’s policy requirement that it was excess when “other primary insurance [was] available” did not alter the result.

The First Department ruled that Mt. Hawley had a duty to defend and indemnify its insured in the underlying action.  First, Mt. Hawley waived its right to rescind the policy after it waited 129 days after first disclaiming coverage before it made its rescission counterclaim.  Second, the policy’s classification limitation and designated operations exclusion did not bar coverage.  The classification limitation limited coverage to plaintiff’s “Operations as an Interior Renovations General Contractor hired by the Owner.”  The designated ongoing operations exclusion applied to “bodily injury or property damage arising out of . . . all exterior work or exterior work projects above ground floor whether by you or by others.”  Mt. Hawley failed to demonstrate that the limitation and exclusion language should be interpreted to mean that there is no coverage if, as here, a particular job included both interior and exterior work.  Instead, another reasonable interpretation is that there would be coverage for bodily injury arising out of interior work but no coverage for bodily injury arising out of exterior work. Because coverage limitations and exclusions must be clear with no other reasonable interpretation, they did not bar coverage for the underlying claim, which arose out of interior work.

Exclusion for “exterior work above ground level” did not exclude underlying loss related to worker who sustained injuries when he fell from a ladder on the ground level outside the subject building. Exclusions “are to be accorded a strict and narrow construction,” and as a matter of “common speech,” “ground level” is reasonably interpreted to mean the first floor. Thus, Mt. Hawley failed to establish that “ground level,” as used in the exclusion, could “only reasonably mean that the covered work must be performed on the ground itself.”

In an action alleging carrier’s bad faith refusal to settle an underlying personal injury suit, the Second Department affirmed denial of the insurer’s motions to dismiss, except as to a separate cause of action for punitive damages.  The complaint adequately pleaded causes of action for bad faith refusal to settle and breach of the covenant of good faith and fair dealing against the insurer after summary judgment was granted on liability in the underlying action. The insurer’s medical report submissions did not “utterly refute” these allegations as required for a motion to dismiss and were not “documentary evidence within the intendment of” a motion to dismiss on documentary evidence under CPLR 3211(a)(1). But the separate punitive damages cause of action should have been dismissed, as punitive damages are a remedy, not a separate cause of action. The complaint’s allegations were still sufficient to seek punitive damages on the remaining causes of action.

The First Department found no coverage under a Travelers “run-off” policy for Xerox’s settlement of breach of fiduciary duty claims but held a Prior Acts Exclusion in a subsequent Travelers policy did not bar coverage as a matter of law. The lawsuits claimed that Xerox had breached its fiduciary duty relating to a potential purchase of Xerox by Fujifilm negotiated in 2017 and 2018. The first Travelers policy was a “run-off” policy, which excluded coverage “arising out of” wrongful acts committed “on or after January 01, 2017.”  The court found no coverage because the negotiations for the Fujifilm transaction began in early 2017—after the run-off date.

The second Travelers policy contained a Prior Acts Exclusion, which excluded coverage “arising from” wrongful acts committed “in whole or in part prior to January 1, 2017.”  Travelers argued that the lawsuits arose from a concealed joint venture between Xerox and Fujifilm that existed before January 1, 2017.  But the court disagreed and held the exclusion inapplicable as a matter of law.  Applying a “but for” test, the court determined that the concealed joint venture was not a “but for” cause of the Fujifilm transaction since the acts giving rise to the liability were the 2017-2018 negotiations, not the preexisting relationship between the entities.  Issues of fact remained as to the reasonableness of Xerox's settlement and whether Travelers acted in bad faith by delaying its coverage denial. The court dismissed Xerox's claim for negligent misrepresentation against Travelers and Travelers' laches defense.

The First Department held that additional insured coverage under a Hudson excess policy was primary to a Lloyd’s CGL policy based on an endorsement in the Hudson policy and the terms of the underlying contract.  The Hudson Policy’s Excess Liability Primary and Non-Contributory Coverage endorsement made the policy “primary to, and on a non-contributory basis with, any other excess insurance available to such Additional Insured, provided that you are specifically required by a written contract to provide such insurance,” and further provided “[c]overage shall be limited to the extent required by the written contract.”  The underlying contract, in turn, required additional insured coverage to be “primary to, and non-contributory with, any other insurance on which the Additional Insured is a named insured.”  That subcontract language made the Hudson excess policy’s additional insured coverage primary to the Lloyd’s CGL policy regardless of whether the policies were primary or “true excess” policies.

The Second Circuit affirmed the district court’s denial of a preliminary injunction seeking to compel insurer Syndicate 1861 to defend insured Daileader in adversary bankruptcy proceedings. The district court properly applied a heightened standard requiring Daileader to show a “clear or substantial” likelihood of success and make a “strong showing” of irreparable harm. This heightened standard applied because the injunction was “mandatory” in that it altered the status quo by forcing Syndicate 1861 to provide a defense it had not previously provided.

Daileader failed to meet this heightened standard. He failed to make a strong showing of irreparable harm, as any injury from delayed payment of defense costs could be compensated by monetary damages, and he did not show that he was “unable to pay” for his defense. Daileader also failed to show a clear likelihood of success on the merits.  Syndicate 1861 relied on a Bankruptcy/Insolvency Exclusion to argue that there was no coverage for the adversary proceeding.  The Second Circuit considered the policy arguments and concluded that Syndicate had the “better argument” and that the adversary proceeding fell within the exclusion.  Finally, the court rejected Daileader’s argument that the Bankruptcy/Insolvency Exclusion was preempted by the Bankruptcy Code.  The court found that Daileader did not clearly show that the proceeds of the Syndicate 1861’s policy had become property of the debtor’s estate.  However, the court noted that circumstances might change as the case proceeds.

In an Insurance Law § 3420 direct action arising from an asbestos exposure judgment, the Fourth Department affirmed that the primary policy exhausted under an “all sums” approach and that there was a "covered occurrence" under the excess policy but found triable issues regarding the timeliness of direct-action plaintiffs' notice and whether an injury-in-fact occurred during the excess policy period.

The court affirmed that the $1 million Lumbermans primary policy, cancelled due to liquidation, had exhausted. The court applied an “all sums” allocation approach to determine whether the Lumbermans primary policy exhausted because that approach was “consistent with” the excess policies’ non-cumulation clauses.  Under the “all sums” approach, plaintiffs exhausted the primary policy by a $1 million credit against the underlying judgment. And the court found a “covered occurrence” despite the policy requirement that an occurrence be unexpected and unintended.  Although the insured construction company’s acts resulting in decedent’s asbestos exposure were intentional, insured did not intend for decedent to develop mesothelioma.

However, the Fourth Department found a triable issue regarding the reasonableness of plaintiffs’ 68-day delay in providing notice to defendant excess insurer. Although the delay was not unreasonable as a matter of law, since plaintiffs only learned of the insured’s failure to provide notice on day 64, reasonableness presented a factual question for trial. Finally, conflicting expert opinions on whether the injury-in-fact occurred on initial asbestos exposure or when a threshold exposure level is reached necessitated a trial on whether the injury-in-fact occurred during the excess policy periods.

The First Department held an insurer had no duty to defend or indemnify a landlord as an additional insured under a policy issued to a tenant based on the policy’s employee exclusion. Although the landlord qualified as an additional insured, the employee exclusion precluded coverage for the tenant’s employee’s claim. The landlord failed to show the exclusion’s exception for liability “assumed under an incidental contract” applied, reasoning simply that “plaintiff did not assume liability under an incidental contract.”

Insurance Law 3420(d), which requires timely disclaimer of coverage “to the insured and the injured person or any other claimant,” did not create coverage. Insurer sent two disclaimer notices, one to plaintiff and the other to both plaintiff and the tenant named insured. Although the second notice was a disclaimer as to tenant, both notices put plaintiff on notice that insurer was denying coverage based on the employee exclusion, and plaintiff could not show prejudice by a belated denial of coverage.

Appellate division overturned the lower court’s finding that the carrier had no duty to defend or indemnify the insured for “personal and advertising injury” based on two exclusions in the CGL Policy—a “prior publication” exclusion and a “criminal acts” exclusion.  The underling litigation, brought by Camila Davalos, arose out of the insured’s use and manipulation of Ms. Davalos’ images to advertise the insured’s services. The lower court found that the prior publication exclusion applied to bar coverage because the insured began using Ms. Davalos’ images years before the policy period.  However, the Appellate Division held that the underlying complaint did not indicate that Ms. Davalos’ alleged injury arose out of any publication which took place prior to the policy period.  Further, the court held that the record failed to demonstrate that the offending images used during the policy period were substantially the same as the images published prior to the policy period.  As such, the prior publication exclusion did not relieve the insurer of its defense or indemnity obligations.

The trial court also found that a criminal acts exclusion barred coverage as the underlying compliant alleged misappropriation and unauthorized use of the images in violation of Civil Rights Law § 50.  The appellate court disagreed, noting that the insured was not convicted of a crime or even charged with a crime, and there were multiple issues of fact concerning whether the insured’s conduct was tortious yet not criminal.  As such, the criminal acts exclusion did not bar coverage.

The New York Court of Appeals held that COVID-19 closures did not qualify as “direct physical loss or damage” under a property insurance policy. The policy insured “all risks of direct physical loss or damage to insured property” and business interruption losses “directly resulting from direct physical loss or damage” to insured property. The insured argued that the virus led to business interruption losses due to the cessation of in-person dining. The Court of Appeals first interpreted “physical damage” to require a material physical alteration to the property that is “perceptible, even if not visible to the naked eye.” The Court then interpreted “physical loss” to require more than loss of use, but “actual, complete dispossession.” Since the complaint did not allege a complete shutdown of the restaurants or permanent impact, and because COVID-19's presence didn't render the properties uninhabitable or cause physical alteration, the court determined there was no coverage for the business interruptions caused by the virus.

The defendants, which disclaimed coverage for two underlying personal injury actions, failed to demonstrate that the exclusion in their commercial general liability policy was stated in clear and unmistakable language and that it applied to the underlying litigation. First, the court concluded that the schedule in the exclusion, which included “ongoing operations” that would not be covered, was ambiguous based on the logically inconsistent use of the term “subcontractor.” Second, it was disputed whether the accidents at issue arose within the scope of the subcontractor’s work or were unrelated to the construction project. As such, the court held that defendants failed to demonstrate that the allegations in the underlying actions were wholly within the exclusion. Additionally, the defendants previously provided coverage for twelve similar claims, and whether they should be bound by their own “practical construction” of the policy could not be resolved on summary judgment.

Insurer’s motion for summary judgment on counterclaim for a declaration rescinding its policy denied.  Insurer argued its policy could be rescinded because insured failed to disclose all “apartment units” in the covered building on the insurance application. The court denied summary judgement based on (a) issue of material fact whether insurer would have charged higher premiums for the undisclosed unit, an unoccupied basement unit; (b) conclusion that the phrase “apartment units” was ambiguous because it could reasonably refer only to units that could be legally been occupied and not to the unoccupied basement unit; and (c) issue of material fact whether the insurer accepted policy premiums after learning of the alleged omission, waiving its right to rescind.

Policy endorsement titled “Designated Person(s) or Entities Exclusion,” which excludes coverage for designated entities, served to subtract coverage rather than to expand it and thus was treated as a policy exclusion. Because carrier sought to deny coverage based on that endorsement, it was required under Insurance Law § 3420(d)(2) to provide written notice of the disclaimer as soon as reasonably possible following the plaintiff's tender for coverage as an additional insured. Defendant's unexplained delay in disclaiming coverage for seven months after the first tender was unreasonable as a matter of law. Defendant thus had a duty to defend the plaintiff in the underlying action.

In a declaratory judgment action between a carrier of primary and first-level excess insurance (American Empire) and a second-level excess carrier (Commerce), Commerce had no coverage obligation because it was not provided with timely notice.  The underlying plaintiff was injured in April 2014 and sued the same year.  But American Empire provided no notice to Commerce until April 2020, after the underlying plaintiff prevailed.  American Empire’s notice was unreasonably delayed for two reasons: (i) American Empire believed since 2014 that there was a 99% chance the underlying plaintiff would prevail; and (ii) American Empire estimated the verdict would be near the amount necessary to trigger the Commerce excess policy.  Under these circumstances, American Empire “could not have reasonably believed” that the Commerce excess policy was “so unlikely to be implicated that it was not necessary to notify [Commerce]."

Policy with covereage for "pollution condtions" and "indoor environmental conditions" did not cover losses relating to COVID-19. COVID-19 was not a "pollution condition" because "throughout the policy, viruses [were] consistently attached to the term 'indoor environmental condition,' and not specifically identified in 'pollution condition.'" While the "indoor environmental condition" coverage included certain viruses, it excluded viruses that "are the result of communicability through human-to-human or bodily fluid contact."

Plaintiff provided no reason to depart from Second Circuit and New York state court precedent that the COVID-19 virus does not alter the covered property in the way required to establish direct "physical loss" or "damage" to covered property. Additionally, because exclusion clauses subtract from coverage rather than grant it, the absence of a COVID-19 exclusion in the policy does not alter the conclusion that an insured has not shown that it suffered a covered loss under its insurance policy.

Law firm sued its insurer for failure to defend the underlying state court action pursuant to a professional liability insurance policy. However, based on the four corners of the underlying complaint, the insurer was under no duty to defend because the policy covered only professional services provided as a lawyer, and the complaint alleged no claim against the law firm falling within that scope of coverage. Instead, the complaint alleged that the law firm breached its contractual duties relating to project management services.

First Department concluded that insureds’ indemnity costs for its subsidiaries’ asbestos liabilities should be allocated to insurer on a pro-rata time-on-the-risk basis. The applicable policies provided “indemnification to losses and occurrences during the policy period.” The First Department cited to Keyspan Gas E. Corp. v. Munich Reins. Am., Inc., 31 N.Y.3d 51 (2018), where the N.Y. Court of Appeals held that pro rata allocation applies only to damages that occurred during the policy period, not over entire period during that damages occurred. The First Department’s decision was not altered by the policies’ other insurance clauses, which, although they contained no temporal or policy period limitation, pertained to concurrent coverage for additional insureds. 

Plaintiff, who sustained injuries at the subject property, signed a release, discharging various insurers of the property from all past, present, and future claims arising from her injuries. Plaintiff then commenced an action against those insurers to recover the amount of the unsatisfied judgment in her favor against the subject property directly from the defendants as the insurers of the property. But contrary to plaintiff’s assertions, the fact that the release was silent as to the subject property and silent with regard to plaintiff’s ability to pursue remedies under the Insurance Law did not remove the action from the broad set of “all past, present, and future claims” against the insurers encompassed by the release.

The voluntary payments doctrine, which bars recovery for payments voluntarily made with full knowledge of the facts and without fraud, mistake of material fact, or mistake of law, prohibited a reinsurer from recovering from an insurer defense costs that the reinsurer claimed it should not have paid. The court concluded that the reinsurer never made any effort to learn its legal obligations and instead simply made payments without objection, assuming the charges submitted were covered. Collateral estoppel was not applicable because the prior ruling concerned policies issued to a different insured and involved different facts related to disputed policy language in that case.

Defendant insurer had no duty to defend and indemnify plaintiff's insured, Overseas, as an additional insured. Plaintiff insurer argued that Overseas was an additional insured under a policy issued by defendant to general contractor Bulson. The extent of additional insured coverage was determined by the terms of the construction contract. However, the construction contract did not reference Overseas. Instead, the contract stated that the parties bound by its terms were "Owner," identified as Fabrizio Ferri (who was the principal of Overseas), and "Contractor," identified as Bulson. Since the contract neither identified Overseas nor identified Ferri in a representative capacity for Overseas, Overseas was not a party to the contract. Therefore, there was no additional insured coverage for Overseas.

Plaintiff insurer was not estopped from denying coverage to defendant for liability arising from an injury suffered by nonparty Howard, who fell on the sidewalk in front of defendant's building. Plaintiff had initially provided a defense because it insured a tenant in defendant's building. During the case, plaintiff discovered Howard did not fall in front of the portion of the premises leased by its insured. Upon this discovery, plaintiff immediately issued letters demanding another insurer take over the defense, reserving its rights to withdraw, deny coverage, and commence a declaratory judgment action. Since this conduct did not “lull[] [defendant] into sleeping on its rights,” the court concluded it did not estop plaintiff from denying coverage.

On a motion to transfer venue in a COVID-19 business losses coverage case, the Second Department affirmed a lower court decision that venue was proper in Kings County. Under CPLR 503(a), venue is proper in the county where a “substantial part of the events or omissions giving rise to the claim occurred.” The fact that plaintiff sought coverage for insured locations in Kings County satisfied that standard despite that plaintiff also sought coverage for hundreds of locations around the country.

Plaintiffs sought declaration that defendant-insurer was obligated to defend and indemnify plaintiffs in underlying action. An insurer is relieved of its duty to defend on the basis of a policy exclusion by establishing that the allegations of the underlying complaint cast that pleading solely and entirely within the exclusion. Here, the insurer established that the assault and battery exclusion in the subject insurance policy was applicable to the claims asserted in the underlying action.

A contractor sued its subcontractor and its subcontractor’s insurer to recover defense costs from an arbitration concerning construction defects. On the subcontractor’s motion, the lower court dismissed based on a joint defense agreement, which provided that each party would bear their own defense costs in the underlying action. But the First Department reinstated the case against the insurer. Although the subcontractor moved to dismiss the complaint “in its entirety,” the insurer neither joined its insured’s motion nor filed its own.

Insurer's delay of more than two years to disclaim coverage was untimely and not "reasonably related to necessary, prompt, and diligent investigation."  It was thus required to defend and indemnify the insured in the underlying action unless the policy was rescinded.  The Court declined the insurer's motion for summary judgment that the policy was void ab initio, finding the unsigned insurance application purportedly showing the insured made material misrepresentations was inadmissible under the best evidence rule.

The Second Circuit ruled that a reinsurer was required to indemnify the cedent under two English law facultative reinsurance policies for an “all sums” settlement the cedent made under the underlying policies. The law of Hawai’i, an “all sums” jurisdiction, governed those underlying policies. The reinsurer argued that the “all sums” doctrine is antithetical to English law, so no indemnification was required. The court disagreed and held the reinsurance policies were “back-to-back” with the underlying policies and adopted their terms, including the Hawai’i choice-of-law clauses (and therefore the “all sums” requirement).

*Note – Chaffetz Lindsey LLP was Counsel to the Insurance Company of the State of Pennsylvania

Insurer denied coverage based on defendant’s misrepresentations in its insurance application and sought a judgment declaring the policy void ab initio. To establish a right to rescind, an insurer must demonstrate that the insured made a material misrepresentation. However, the affidavit submitted by the chief underwriter, as well as his deposition testimony, was conclusory, unsupported by the documentary evidence, and thus failed to establish materiality as a matter of law

Insurer disclaimed coverage because, first, the insured did not own the property at the time of the loss (insured's LLC owned it) and thus did not have an “insurable interest” and, second, because of the insured’s misrepresentations in its insurance application. Because the insured was the sole owner and member of the LLC that owned the property at the time of the loss, he had an “insurable interest,” as defined by the Insurance Law, in the property. Additionally, the insurer waived its right to assert the misrepresentations as a basis for rescinding the policy because it accepted a premium payment after it discovered the misrepresentations.

Although a new building owner was misidentified on an additional insured endorsement in tenant's policy, "the fact that the endorsement was never updated by the tenant to reflect a mere change in ownership is of no moment.  The name of the insured in the policy is not dispositive if the intent to cover the risk, as here, is clear."  Additionally, by disclaiming coverage based on an exclusion for the first time in its answer, the tenant's insurer failed to provided timely notice of disclaimer.  The court affirmed grant of summary judgment that the tenant's insurer had a duty to defend and indemnify the new building owner as an additional insured.

Under the antisubrogation rule, an insurer has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered. The insurer of a construction manager argued that excavator’s third-party action against the manager was barred by the antisubrogation rule. According to the insurer, (a) the contract between the manager and excavator called for the manager to be named as an additional insured under the excavator’s policy, and (b) the action was, in essence, a subrogation action on behalf of the excavator's insurer. Assuming the action could be deemed a subrogation action, the court nonetheless found no basis to dismiss the third-party action because there had been no showing that the manager was covered as an additional insured under the excavator’s policy.

Two insurers—one that issued a CGL policy, the other an umbrella policy—disagreed about (1) whether landowners were additional insureds under the CGL policy, and (2) the priority of coverage afforded by the policies. The Second Circuit affirmed that there was no written agreement sufficient to qualify the owners as additional insureds under the CGL policy. Next, the court compared the policies’ “other insurance” clauses, which indicated that the general liability policy was primary to the umbrella policy.

In a DJ action seeking declaration that N.Y. Crane was an additional insured under a policy issued to Broadway Concrete by Interstate, issues of fact existed whether N.Y. Crane, who possessed a certificate of insurance only listing a previous policy issued by Interstate to Broadway Concrete and not the operative policy, had sufficient information to identify Interstate as Broadway Concrete’s liability insurer, precluding summary judgment as to timeliness of N.Y. Crane’s notice.

Excess insurers could offset insured’s recoveries from settling insurers, including above-limits payments of interest and attorneys’ fees made by settling insurers.  Although the above-limits payments arose from litigation on insured’s counterclaims, not from the loss, the above-limits payments were nonetheless “in connection with” the loss because of the “expansive[]” reading courts give those terms.  Per provision triggering excess policies on primary insurer “paying or being held liable to pay,” prejudgment interest accrued on excess insurers on date court held primary insurer liable. Bankruptcy stay did not provide a basis to toll accrual of prejudgment interest.

No dismissal for forum non conveniens in coverage suit where transactions giving rise to the coverage dispute arose primarily in Canada.  The bulk of the policies were issued, brokered, or negotiated in New York, the coverage dispute involved mines in in Canada, Wales, Japan, Indonesia, and New Jersey, and New York courts are “fully capable” of applying Canadian law.  No dismissal of certain insurers as improperly joined.  Although Travelers did not state a cause of action against these carriers, they were necessary parties that might be inequitably affected by a judgment.

Defendant insurer precluded from relying on policy exclusions in Insurance Law § 3420(a) direct action because although insurer explained the basis for its denial of coverage to the insured, it only “briefly stating in one sentence that there was no coverage available” to the plaintiff.  But triable issue of fact remained as to whether confession of judgment between insured and the plaintiff was the product of collusion because the insured “agree[d] to a confession of judgment in the precise amount of her insurance policy limit in exchange for an assurance that plaintiff would not seek to enforce the judgment against her.”

NSC issued Napoli homeowner's and excess policies that excluded coverage for claims “arising out of[ ] business activities ... of any insured.”  Napoli sought a declaration that NSC had a duty to defend Napoli against a suit brought by Rubin.  As amended, Rubin's complaint against Napoli alleged that, after Rubin filed her initial complaint alleging employment discrimination, Napoli made false and retaliatory accusations against her.  The Second Circuit concluded that all of these allegations "arose out of" Napoli's business activities.  The fact that Rubin was Napoli's "personal counsel" did not change the analysis because "to find that such allegations somehow arose from [Napoli's] personal activities rather than their business activities would require us to 'hypothesize or imagine episodes or events that cannot be found among the allegations.'”

Insurer was not required to indemnify an insured under a policy that required, as a condition precedent to coverage, the insured to notify the insurer of a loss “as soon thereafter as practicable, and in any event within sixty (60) days . . . .” The insured first became aware of the potential for loss by July 25, 2013, but did not notify the insurer until either September 14th (according to the insured) or September 25th (according to the insurer). Although the September 14th notice date would have been within 60 days of July 25th, the First Department emphasized the conjunctive “and” in the notice provision. It found, regardless of which notice date was correct, the insured did not give notice “‘as soon as practicable’ or reasonable.”

The lease between landlord defendant and tenant jewelry company, plaintiff Lloyd’s insured, contained a waiver of subrogation provision conditioned on the parties obtaining insurance permitting a waiver of subrogation. In turn, the waiver of subrogation clause in Lloyd’s policy to tenant jewelry company permitted waiver of claims against “persons or companies.”  Despite Lloyd’s argument that the parties’ intent was to limit subrogation to “persons or companies” that “wear or carry the tenant's jewelry,” the court concluded that landlord was a "person or company," and the policy unambiguously permitted waiver of subrogation against landlord defendant.  Accordingly, the First Department reversed a grant of summary judgment in favor of Lloyd’s and ordered the case dismissed.

Plaintiffs sought coverage for damage and losses stemming from bricks falling from the facades of their adjoining buildings. While the subject policies contained exclusions for building collapse, the policies had an “abrupt collapse” exception to the exclusion. One defendant-insurer failed to establish that its policy excluded the collapse at the building it insured. The other insurer’s photographic evidence that the bricks at the building it insured remained intact established that there was no “falling down or caving in,” and thus the “abrupt collapse” exception to the building collapse exclusion did not apply.