92 N.Y.2d 682 (1999)
The phrase “similar coverage for ‘your work’” in the excess coverage provision of a commercial general liability (CGL) policy refers to first-party property coverage, not third-party liability coverage.
Summary
This case addresses the interpretation of an “other insurance” clause in a Commercial General Liability (CGL) policy. A carpenter was injured while working at Selby’s apartment. Selby had a homeowner’s policy with Great Northern, and her contractor, Monier, had a CGL policy with Mount Vernon. Both policies covered the loss, but they disagreed on which was primary. The Mount Vernon policy was primary except when the other insurance was “Fire, Extended Coverage, Builder’s Risk, Installation Risk or similar coverage for ‘your work.’” The court held that “similar coverage for ‘your work’” refers to first-party property coverage, not third-party liability coverage like Selby’s homeowner’s policy; therefore, Mount Vernon’s CGL policy was primary.
Facts
John Hlavaty, a carpenter, was injured while renovating Linn Howard Selby’s cooperative apartment. Hlavaty was an independent contractor working for William Monier Construction Company, the general contractor hired by Selby. Monier agreed to defend and indemnify Selby for injuries arising from the construction work and obtained a CGL policy from Mount Vernon Fire Insurance Company, naming Selby as an additional insured. Selby also had a homeowner’s policy with Great Northern Insurance Company.
Procedural History
Great Northern and Selby sued Mount Vernon in federal court to determine coverage responsibilities. The District Court held both policies were excess to each other, requiring pro rata sharing of costs. The Second Circuit Court of Appeals certified a question to the New York Court of Appeals regarding the interpretation of the phrase “similar coverage for ‘your work’”. The New York Court of Appeals accepted the certified question.
Issue(s)
Whether the phrase “similar coverage for ‘your work’” in the excess coverage provision of the “other insurance” clause of a commercial general liability policy renders that policy’s coverage excess to the third-party liability coverage provided by a homeowner’s policy.
Holding
No, because the phrase “similar coverage for ‘your work’” in the CGL policy refers to first-party property coverage and not third-party liability coverage provided by a standard homeowner’s insurance policy.
Court’s Reasoning
The court reasoned that the phrase “similar coverage for ‘your work’ ” must be interpreted within the context of the enumerated coverages (Fire, Extended Coverage, Builder’s Risk, Installation Risk) listed in the Mount Vernon policy’s “other insurance” clause. These enumerated coverages are all forms of first-party property insurance, which protect against loss or damage sustained by an insured to its own property. “First-party coverage pertains to loss or damage sustained by an insured to its property; the insured receives the proceeds when the damage occurs.” The court distinguished this from third-party coverage, which protects against claims made by third parties against the insured. The Great Northern homeowner’s policy, while a hybrid policy, primarily provided third-party liability coverage for Hlavaty’s injuries. Because the Mount Vernon policy was designed to be excess only to policies providing first-party property coverage for commercial work, the court held that the Great Northern homeowner’s liability coverage was not “similar coverage” within the meaning of the Mount Vernon policy. The court cited cases from other states and industry interpretations supporting its conclusion. As stated by the court, “Thus, read within the context of the enumerated coverages, we interpret ‘similar coverage for your work” to mean first-party property coverage for commercial work.’”