Application Of Five Borough Exclusion In CGL Policies Questioned

Because of the specific liability exposures associated with working in the five boroughs of New York City, many insurers have added an exclusion to the standard CGL policy excluding coverage for worked performed in the five boroughs. However, a recent decision from the Supreme Court, Richmond County has called into question the application of the five borough exclusion.

In Bonded Waterproofing Svcs, Inc. v. Anderson-Bernard Agency, Inc., 12711/2009, the insured was performing work in Queens County when an injured pedestrian brought suit against the insured, alleging that the insured’s negligence caused the accident. After the carrier denied coverage based upon the five borough exclusion the insured brought a declaratory judgment action seeking coverage. The carrier moved to dismiss, and the court denied the motion.

The court held that questions of fact exist as to the applicability of the exclusion. The court cited to the fact that the carrier previously provided coverage for work within the five boroughs, and was aware that the insured performed work in the five boroughs. In addition, a certificate of insurance was issued naming the general contractor as an additional insured under the insured’s policy, and the certificate listed the job site as located in Queens. This was, according to the court, sufficient to raise questions of fact.

Of course, the court did not mention who issued the certificate (the insured’s broker was also a defendant), or why the fact that an insurer previously provided coverage in New York City precludes the application of the five borough exclusion exclusion in a subsequent policy. These issues will likely be the subject of an appeal.

If you have any questions about this post, please contact David Tavella at dtavella@wcmlaw.com.