The Rogak Report: 02 Oct 2008 ** Additional Insureds - Premises Liability **
TENANT'S INSURANCE DEEMED TO COVER COMMON STAIRCASE ACCIDENT BECAUSE STAIRS WERE USED BY TENANT
Jenel Management Corp. v. Pacific Insurance Co. 2008 NY Slip Op 07192 Decided on October 2, 2008 Appellate Division, First Department Edited by Lawrence N. Rogak
This decision arises out of common and always-perplexing problem in premises liability cases: whether a tenant's insurance provides coverage to the landlord, as an additional insured, when an accident occurs in a common area of the building that is used by the tenant.
"At issue," held the Appellate Division, "is whether the stairwell area where the underlying accident occurred is covered by the additional insured clause in the policy procured by the underlying plaintiff's employer from defendant herein, which clause extends coverage to plaintiff insurer's coplaintiffs herein, the employer's landlord and the managing agent of the building."
"Coverage exists because the underlying claim arose out of the 'maintenance or use' of the leased premises, within the meaning of the additional insured clause, where the accident occurred in the course of an activity necessarily incidental to the operation of the space leased by the employer, and in a part of the premises that was necessarily used for access in and out of the leased space (see ZKZ Assoc. v CNA Ins. Co., 89 NY2d 990 ; New York Convention Ctr. Operating Corp. v Cerullo World Evangelism, 269 AD2d 275, 276 )."
"We note that this result is consistent with the lease, which required the employer to procure insurance against any liabilities 'on or about the demised premises or any appurtenances thereto.'"
"The concededly excess policies that defendant would have the court review raise no priority-of-coverage issues. The coplaintiffs' third-party claims against the employer were an essential component of their defense of the main underlying action, and, accordingly, plaintiff insurer is entitled to reimbursement of the $7,059.25 in attorneys' fees it incurred in prosecuting those claims."
Comment: Note the language which I have emphasized in bold type above. In cases like this involving additional insureds, an analysis must be made as to whether the space in which the accident occurred was "necessarily incidental" to the operation of the leased space.