An insurer’s duty to defend is generally governed by the allegations in a complaint, but whether or not extrinsic evidence  — or information later revealed during discovery — can be used when making a coverage determination differs greatly from state to state.  A New York court (applying New Jersey law) recently dealt with the issues of whether facts in a Bill of Particulars triggered coverage in CB Richard Ellis, Inc. v Harleysville Ins. Co. of N.J.

In this case, the underlying complaint alleged that the plaintiff fell on the sidewalk due to ice and snow. Harleysville’s insurance policy had an exclusion for claims related to the removal of snow and ice, so they disclaimed coverage, and during the ensuing lawsuit,
moved for summary judgment based upon the exclusion. The trial court denied the motion and instead granted the plaintiff’s cross-motion.

On appeal, the Court noted that the underlying complaint also alleged general negligence in the ownership, operation, management, maintenance and control of the premises and/or sidewalk where the accident occurred. The bill of particulars then explained these allegations by claiming that the insured was negligent by failing to safeguard, cordon off or provide warning signs in the unsafe, slippery area of the accident. Thus, the allegations in the underlying complaint, as amplified by the bill of particulars, did not all arise out of ice and snow removal and the trial court found for coverage. As a result, the First Department upheld the decision requiring coverage.

Thanks to Jorgelina Foglietta for her contribution to this post and please write to Mike Bono for more information.