The Clear Language Of The Insurance Contract Controls

Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104

Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy

In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.

The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.

KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. (Plaintiff).
Venchi 2 LLC is insured by Sentinel Insurance Company, Ltd. (Defendant) through its parent entity Venchi U.S. Inc. .
Claims:
Associated sought a summary judgment declaring that Sentinel has a duty to defend and indemnify CAEA in the underlying action, and that Sentinel's coverage is primary while Associated's coverage is excess .
Sentinel opposed this and sought a summary judgment for itself, declaring that CAEA does not qualify as an additional insured under the policy held by Venchi U.S., and therefore, Sentinel does not have a duty to defend and indemnify CAEA.
Court's Decision:
The court denied Associated's motion for summary judgment and granted Sentinel's motion for summary judgment.
The court held that CAEA is not entitled to additional-insured coverage under the Sentinel policy, and therefore, Sentinel does not have a duty to defend and indemnify CAEA in the underlying action.
BACKGROUND

On September 20, 2018, Eduardo Molina, a construction worker, allegedly fell from a scaffold while working on a project at 861 Broadway, New York, NY.  Molina sued Venchi 2, CAEA, and Transworld Equities, Inc., asserting claims of common law negligence and failure to provide a safe workplace under New York Labor Law and the Industrial Code .

INSURANCE POLICIES
Sentinel Policy: Issued to Venchi U.S. for the period October 13, 2017, to October 13, 2018. Venchi U.S. is the only named insured .
Associated Policy: Issued to Transworld Equities, Inc. for the period April 16, 2018, to April 16, 2019. CAEA is identified as a named insured .
CONCLUSION

The court concluded that Sentinel does not have a duty to defend and indemnify CAEA in the underlying action, and Sentinel was not required to reimburse Associated for any costs incurred .

DISCUSSION

Under New York law it is well-established that courts determining a dispute over insurance coverage must first look to the language of the policy. The language of the policy is then to be interpreted according to general rules of contract interpretation. An insurance contract is interpreted to give effect to the intent of the parties as expressed in the clear language of the contract.

If a contract is unambiguous, courts are required to give effect to the contract as written and may not consider extrinsic evidence to alter or interpret its meaning. A contract is not ambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself and concerning which there is no reasonable basis for a difference of opinion. Unambiguous provisions of an insurance policy are to be given their plain and ordinary meaning, and the plain and ordinary meaning of words may not be disregarded to find an ambiguity where none exists.

Given the Court's holding that CAEA is not entitled to additional-insured coverage, the Court further held that:

Sentinel does not have a duty to defend and indemnify CAEA in the Underlying Action, which moots Associated's further request for relief regarding a declaration that Associated's coverage is excess; and
Sentinel is not required to reimburse for costs incurred or that will be incurred in defending and, if necessary, indemnifying CAEA in the Underlying Action.

For the foregoing reasons, the Court granted Sentinel's motion for summary judgment and denied Associated's motion for summary judgment was granted .

ZALMA OPINION

A person can only become an "additional insured" on a liability policy if named on the policy itself as an additional insured or by the terms of the contract - even if unnamed - the person or entity is entitled to additional insured rights. The right to a defense did not exist because the court concluded from the clear and unambiguous language of the policy there was no coverage owed by Sentinel to CAEA.

(c) 2025 Barry Zalma & ClaimSchool, Inc.

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