Chapter 15 General Liability Insurance in New Appleman New York Insurance Law, Second Edition

One of the 54 chapters in the second edition of New Appleman New York Insurance Law released in December of 2009 is "General Liability Insurance" by Robert Goodman and Steve Vaccaro of Debevoise and Plimpton LLP.

The chapter covers the basic elements of commercial general liability insurance and the most commonly litigated issues concerning such insurance. The chapter focuses on most of the risks typically insured under CGL policies. The chapter considers policy definitions and terms found in the most recent version of the ISO form commercial general liability policy, while noting important differences in the definitions and terms construed by courts in particular decided cases.

Section 15.06 highlights the importance of policy exclusions to insurers in determining whether coverage exists. The authors state that “To negate coverage by virtue of an exclusion under New York law, an insurer must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case. Courts will not extend policy exclusions by interpretation or implication, but rather will give them a strict and narrow construction. However, the fact that an exclusion operates in "surprising and unfair ways" does not suggest that the court should employ the " 'reasonable expectations' doctrine to mitigate the rigors of [the] exclusion[]." When it is asserted that multiple exclusions apply to a single loss, each of the asserted exclusions should be applied to the facts seriatim, rather than applying the exclusions together or cumulatively. An exclusion cannot by implication create or extend coverage. A policyholder may be forced as a practical matter to admit that an exclusion applies in order to rebut the merits of a claim against it; in these circumstances, courts may nonetheless require the insurer to defend, on the grounds that the duty to defend reaches even meritless claims, and that the policyholder should not in fairness be forced to choose between the defense rights it paid for and success in defending the claim against it. If the policyholder produces an incomplete policy establishing coverage but missing essential terms such as exclusions, the court may receive the evidence of coverage and require the insurer to prove the substance of any missing terms.”

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