CGL Policy Does Not Cover Damage to Insured’s Building

New Lahori Kabab Inc. v. 122-24 Lexington Ave. Corp. et al., N.Y. Index 653083/2017 (NY Sup. Ct., NY Co. 2018)

This litigation involved the plaintiff-insured’s claim under a commercial general liability policy for property damage to a restaurant. Plaintiff sued Wesco seeking coverage for water damage caused by a fire in the apartments above the restaurant as well as damages for mental suffering by the restaurant’s owner.

Wesco moved for summary judgment, arguing that plaintiff was not entitled to coverage because it had purchased a liability policy, which required a legal obligation to pay a third party. Wesco additionally contended that plaintiff’s claim for coverage under the “premises rented” provision failed because it, too, was subject to the policy’s insuring agreement requiring a legal obligation to pay a third party. Finally, Wesco took the position that plaintiff’s claim for mental suffering and medical damages was duplicative of its breach of contract action, and the policy was issued to a corporation, which cannot suffer personal injuries.

Following oral argument, the court agreed with Wesco that the policy did not provide first-party property coverage and, instead, provided coverage only where there was a third-party legal obligation.  Wesco’s motion for summary judgment was granted and all causes of action were dismissed.

Wesco Insurance Company was represented by partner Kevin F. Buckley.


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