In Liberty Mutual Ins. Co. v. Selective Ins. Co. of America, the United States District Court for the Eastern District of Pennsylvania considered a demand for defense and indemnification of a lawsuit concerning an accident at a shopping center. An employee of a tenant was seriously injured after falling on a purportedly defective sidewalk outside the tenant’s establishment during a break from work. The employee and his wife filed a negligence action against six entities that owned and/or managed the center. These entities referred the action to their liability insurer, which in turn demanded defense and indemnification from the tenant’s liability insurer. The shopping center entities’ insurer contended that the defendants were entitled to coverage as additional insureds on the tenant’s policy. The tenant’s insurer declined to provide defense and indemnification, prompting the shopping center entities’ insurer to pursue a declaratory judgment action against the tenant’s insurer. Following discovery, both insurers filed motions for summary judgment.
In reviewing the motions, the Court noted that the policy provided coverage to additional insureds with respect to “[b]odily injury…caused, in whole or in part by [the insured’s] ongoing operations performed for [an additional insured], ‘[the insured’s] product’ or premises owned or used by [the insured].” The shopping center entities’ insurer contended that for the purposes of this provision, “premises” not only included the space rented by the tenant, but also the common areas of the shopping center. The Court observed that the term “premises” was not defined in the policy, and dictionary definitions did not answer the question of whether it included common areas. The Court then turned to the tenant’s lease agreement, which defined “premises” to consist of the space rented by the tenant, and did not make any reference to the common areas. The Court therefore concluded that the tenant’s insurer did not have a duty to defend or indemnify the shopping center entities, and granted summary judgment in the insurer’s favor.