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Vol. 9 - Issue 4
May 31, 2020


It This Just A Technicality?: Is Coverage Owed To “Insured LLC” Under Policy Issued To “Insured Inc.”?


We’ve all seen this issue.  A liability policy lists a company as an insured but the defendant named in the suit is different, but not by much.  Think “Insured LLC” and “Insured Inc.”  So, while technically the defendant is not an insured, it’s close.  Plus the two entities have the same owner and same address.  Is this a basis to disclaim coverage, including a defense?

This was the issue in East End Funeral Home, Inc. v. American European Insurance Company, No. 19-1410 (S.D.N.Y. Mar. 26, 2020).  East End, Inc. operates a funeral home in the Bronx. [Good name for a funeral home]  The funeral home premises is owned by East End, LLC.  The premises had been owned by East End, Inc. and it was transferred to East End, LLC in 2001.  The two entities have the same owners. 

East End LLC was named as a defendant in a suit for a slip and fall in the funeral home parking lot.  East End, LLC sought coverage under a liability policy – but issued to East End, Inc.  The insurer denied coverage on the basis that East End, LLC, the defendant in the suit, was not an insured under the policy issued to East End, Inc.

East End, LLC’s argument was basically, come on guys, what’s the difference, we’re just one big happy company: “Plaintiffs argue that, in interpreting the parties’ reasonable expectations, the Court should consider that East End Inc. procured the Policy to protect against risk, including defense and indemnification for a personal injury claim at the Premises, notwithstanding the transfer of title from East End Inc. to East End LLC. Plaintiffs argue that East End Inc.’s name as the Insured on the Policy is not dispositive of whether the Policy was meant to cover East End LLC, where there is an ‘identity of ownership’ between East End Inc., as the operating entity, and East End LLC, as the entity which owns the real estate, and where there was no change in the use or occupancy of the Premises during the time the Policy was in effect.”

But the court disagreed: “While the Court is sympathetic to these arguments, the average insured could not reasonably expect the Policy to cover East End LLC, where the Policy clearly states that East End Inc. is the only covered entity, ‘corporation’ is listed as the only type of covered business and the Policy contains unambiguous language stating that ‘[n]o person or organization is an insured . . . that is not shown as a Named Insured in the Declarations.’”

The court did note that the insured cited some cases suggesting that “New York courts have accommodated exceptions for an unnamed insured in certain circumstances,” but “these cases are distinguishable; none of them involve two separately formed corporate entities and a policy that unambiguously insures only one entity.”

The moral of the story here seems to be that differences between the insured and the defendant, based on the reason, can be excusable and not a basis to disclaim coverage.   But sometimes just because it looks like a technicality, swims like a technicality and quacks like a technicality, does not mean that it’s a technicality.


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