Commercial General Liability Insurance Policy Did Not Cover Breach of Contract Claim

On September 27, 2017, the Second Department issued a decision in J.W. Mays, Inc. v. Liberty Mutual Insurance Co., 2017 NY Slip Op, 06639, holding that a commercial general liability policy did not afford coverage for a breach of contract claim, explaining:

The general rule is that a commercial general liability insurance policy does not afford coverage for breach of contract, but rather for bodily injury and property damage. To hold otherwise would render an insurance carrier a surety for the performance of its insured's work. The determination of an insurer's duty to defend must be drawn from allegations of the underlying complaint. Here, the complaint in the Owens action sounds exclusively in breach of contract and unjust enrichment, and seeks to foreclose on mechanic's liens. There is no claim for bodily injury, property damage, or personal and advertising injury as is required to trigger coverage under the policies herein. Accordingly, the Supreme Court properly granted that branch of the defendants' motion pursuant to CPLR 3211(a) which was, in effect, for a judgment declaring that they are not obligated to defend or indemnify the plaintiff in the Owens action.

(Citations omitted).