Lend Lease (US) Constr. LMB Inc. v. Zurich Am. Ins. Co., No. 11, 2017 N.Y. LEXIS 112 (N.Y. Feb. 14, 2017)
Early, in its opinion, the New York Court of Appeals noted that “[o]ne of the most dramatic images of [Superstorm Sandy] depicts the damage caused to [a] crane [being used on the construction of a 74-story skyscraper] when the boom of the crane collapsed in high winds and teetered precariously from a height equal to the top of the building.” At the time of the incident, Extell, the owner of the project, was the named insured on a $700 million builder’s risk insurance program comprised of five separate insurance policies. Lend Lease, the contractor, was an additional insured on the policies.
Following the incident, Extell and Lend Lease submitted a claim to the insurers seeking to recover the damages incurred by Extell and Lend Lease resulting from weather-related harm to the crane. The insurers denied the claim and disclaimed that there was coverage under the policies. This action ensued. Both parties filed motions seeking summary judgment on the coverage issue. The trial court denied the motions, ruling that there was an issue of fact regarding the applicability of certain exclusions in the policies. On appeal, the Appellate Division granted the insurers’ motion for summary judgment, finding that there was no coverage because the crane did not fall within the policies’ definition of “temporary works.” This appeal followed.
Resolving the appeal required the Court of Appeals to answer two questions. First, was the damage to the crane covered under the policies in the first instance. Second, if there was coverage, was it defeated by the policies’ contractor’s tools exclusion. As explained below, the court concluded that although there may have been coverage in the first instance, the coverage was defeated by the exclusion.
Continue Reading New York Court of Appeals Holds That Tower Crane Damaged By Superstorm Sandy Is Not Covered by Project’s Builder’s Risk Insurance Program