Exclusion for Bodily Injury to an Employee of Any Insured Held to Apply to Negate CGL Coverage to Building Owner for Injury to Tenant's Employee

CGL – ADDITIONAL INSURED – BODILY INJURY TO EMPLOYEE OF ANY INSURED EXCLUSION
Howard & Norman Baker, Ltd. v American Safety Cas. Ins. Co.
(2nd Dept., decided 7/13/2010)

American Safety Casualty Insurance Company (ASCIC) issued a CGL policy to Point Recycling, which was a tenant in a building owned by the plaintiff, Howard & Norman Baker, Ltd. (HNB).  As required by the lease between HNB and Point, HNB was named as an additional insured under Point's CGL policy.  Roberto Ruiz, an employee of Point, commenced an action to recover damages for personal injuries he allegedly sustained in the subject building, and the defense of HNB in that action was tendered to ASCIC, which denied coverage based, in part, on the ground that the policy contained an exclusion for "bodily injury to . . . [a]n employee of any insured arising from and in the course of . . . [e]mployment by any insured."

HNB then commenced this action for a judgment declaring that ASCIC was obligated to defend and indemnify it in the underlying action. After ASCIC moved to vacate plaintiff's note of issue, HNB cross-moved for summary judgment declaring that ASCIC was is obligated to defend and indemnify it in the underlying action.  Supreme Court denied HNB's cross motion for summary judgment and, in effect, denied American's application to search the record and award summary judgment in its favor. 

In REVERSING the lower court's order and granting summary judgment to ASCIC, the Second Department held that the policy's BI-to-an-employee-of-any-insured exclusion was clear and unambiguously applied to negate liability coverage to HNB for the underlying personal injury action:

Here, the plain meaning of the exclusion invoked by American was that the Policy did not provide coverage for damages arising out of bodily injury sustained by an employee of any insured in the course of his or her employment (see Bassuk Bros. v Utica First Ins. Co., 1 AD3d at 471; see also Hayner Hoyt Corp. v Utica First Ins. Co., 306 AD2d 806, 807; Consolidated Edison Co. of N.Y. v United Coastal Ins. Co., 216 AD2d 137; Tardy v Morgan Guar. Trust Co. of N.Y., 213 AD2d 296). Despite the Policy provision stating that "this insurance applies if each Named Insured were the only Named Insured," the exclusion's reference to "any insured" makes it unmistakably clear that the exclusion is not limited to injuries sustained by HNB's employees (cf. Greaves v Public Serv. Mut. Ins. Co., 5 NY2d 120). Accordingly, since Ruiz was an employee of one of the insureds, his injury is not covered under the Policy. The Supreme Court, therefore, should have granted American's application to search the record and award it summary judgment declaring that it is not obligated to defend and indemnify HNB in the underlying action.