Severability Clause Given No Effect on Exclusion Applicable to "Any Insured"
On June 23rd, Sara reported on a recent California Supreme Court decision which held that an intentional acts exclusion that applied to the conduct of “an insured” did not apply to negligent supervision claims against a co-insured, reasoning that the severability clause rendered the exclusion ambiguous. A contrary result obtained in Howard & Norman Baker, Ltd. v American Safety Casualty Insurance Company, 2010 NY Slip Op 06077 (July 13, 2010), in which a New York appellate court gave no effect to the severability clause in the context of an employee exclusion that applied to “any insured.” In this case, a landlord that qualified as an additional insured under its tenant’s policy sought coverage for claims asserted against it by the tenant’s employee. The insurer denied coverage because the policy excluded coverage for “bodily injury to . . . [a]n employee of any insured arising from and in the course of . . . [e]mployment by any insured.” Though short on explanation, the court found no ambiguity in the exclusion despite the severability clause, holding that the “plain meaning of the exclusion . . . 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,” and that “reference to ‘any insured’ makes it unmistakably clear that the exclusion is not limited to injuries sustained by [tenant’s] employees.”
