The New York Court of Appeals considered whether a Landlord was an additional insured under a policy obtained by the Tenant. See Kassis v. The Ohio Casualty Ins. Co., No. 117 (N.Y. Ct. App. June 25, 2009).
The Landlord leased property to the insured, who, pursuant to the lease, obtained a commercial general liability insurance policy from The Ohio Casualty Insurance Company. The policy provided bodily injury coverage where "the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement" which falls within the definition of an "insured contract." The policy extended coverage not only to the named insured, but also to any person whom the named insured was required to name as an additional insured under a written contract or agreement.
There was no dispute that the lease was a insured contract. It obligated the insured to "indemnify, defend, and hold harmless" the Landlord from any liabilities arising out of occupancy of the premises caused by the Tenant. The lease further provided the Tenant was to obtain a general liability policy "for the mutual benefit of Landlord and Tenant."
When the insured's employee slipped on snow and ice outside the premises, injuring himself, he sued the Landlord. Ohio Casualty disclaimed coverage because the Landlord was not a named insured. In the coverage action, the Supreme Court found Ohio Casualty was obligated to defend. The Appellate Division reversed.
The Court of Appeals reversed the Appellate Division. An additional insured was entitled to the same protection as the named insured. Here, the insured was not required to complete and return to Ohio Casualty any notification forms listing the persons it intended to name as additional insureds. The intended meaning of "mutual benefit" in the lease was that Landlord and Tenant were intended to enjoy the same level of coverage. Because the Landlord was an additional insured, Ohio Casualty was obligated to defend.
