Court Compels Liability Insurer to Defend and Indemnify Landlord - Even Though Landlord Was Never Named on the Tenants' Policy

In an "off-the-beat" case, Kassis v. Ohio Casualty Ins. Co., 12 N.Y.3d 595, 885 N.Y.S.2d 241 (2009), New York's Court of Appeals (the highest court in New York State) held in favor of a landlord - and against his tenant's liability insurer - that since the lease required the tenant to name the landlord as an additional insured on their liability policy for their "mutual benefit," the landlord was automatically deemed an additional insured under the policy, even though the landlord wasn't in fact named on the policy at all.  Consequently, by dint of the Court's holding, the insurer was obligated to not only defend the landlord in the underlying personal injury action that arose from a worker's claim that he was injured when he slipped and fell on snow fronting the landlord's property, but the insurer was also required to indemnify the landlord for any settlement or judgment up to the policy's full liability limits.

A word of caution is in order, however, and here's why: a perusal of this decision suggests that this ruling is of limited scope, and confined to the particular facts of this case. Specifically, in rendering the opinion, Chief Judge Lippman notes that the insurance policy in this case had a provision that extended coverage to the named insured as well as “any person or organization whom [the named insured is] required to name as an additional insured." 

Nevertheless, this decision serves as yet another reminder to small businesses in New York why you should never assume the validity of an insurer's disclaimer of coverage.