Being a Named or Additional Insured Not Always Necessary for Coverage


The Building and Personal Property Coverage Form CP 00 10 of Insurance Services Office (ISO) also includes coverage for the personal property of others, but situated within 100 feet of the building or within 100 feet of the premises described in the Declarations, whichever distance is greater. Like the AAIS coverage provision, the property also must be in the care, custody or control of the named insured — and the insurer’s payment for loss or damage to such personal property of others only applies for the benefit or account of the owner of such property. What this means is that payment of loss is made to the owner of property and not to the policy’s named insured who had care, custody or control of the property.

Generally, coverage for “property of others” applies to personal property. It is possible, however, for coverage to also apply to real property. A case in point is Ramparts, Inc. d/b/a Luxor Hotel and Casino v. Fireman’s Fund Insurance Company, et al., Case No. 2:09-cv-0371-RLH-LRL (U.S. Dist. Ct. NV 2010). The hotel (lessor) which owned and operated the hotel and casino entered into a lease agreement with a lessee who agreed to construct, develop and operate a restaurant in the complex. Shortly after signing the lease agreement the lessee demolished the existing interior fixtures, designed and performed structural modifications, and installed new finishes, fixtures and equipment. During this period the lessee had obtained a policy that included builder’s risk coverage. After completion of the work, the policy was cancelled and rewritten on a package policy.

During the restaurant’s peak operating hours, part of the restaurant’s premises became overloaded with people and, as a result, a portion of the structure began to buckle and fall. The floor collapsed, damaging the structures of both the restaurant and hotel. Both the lessor and lessee paid to repair the structural deficiencies and damage to their respective properties.

The lessee then made a claim for loss of income and property damage under its policy for nearly $500,000, which was paid. When the lessor submitted claims for indemnification as an additional insured under the lessee’s initial builder’s risk and subsequent (package) policies, they were denied. Coverage under the builder’s risk policy was held not to apply because the loss occurred after that coverage had ended. Likewise, additional insured status was held to be inapplicable under the subsequent package policy because an additional insured was entitled to coverage only when bodily injury, property damage or personal and advertising injury was caused by its acts or omissions, and the lessee was not sued by anyone.

The lessor, however, was able to obtain coverage for loss to its property under the lessee’s property policy in light of the coverage applicable to “property of others.” The lessee’s policy stated that it “will cover the property of others while it is at a covered location … against loss from a cause of loss we cover that applies to your business personal property at the location.”

In its analysis of this provision the court found for coverage because: (1) “property of others”was determined not to be property that belonged to the lessee (named insured); (2) a “covered location” included the hotel and casino of the lessor; and (3)...