Article examines scope of ‘designated premises’ insurance clause

August 2010

Claims Magazine

BOSTON (Aug. 6, 2010) – In an article published in the August issue of Claims Magazine, James J. Duane III and Scarlett M. Rajbanshi examine the reach of the “designated premises” clause in commercial general liability insurance policies.

Court rulings from around the country vary on interpreting the provision, which is intended to limit an insurer’s risk to occurrences at the primary business premises used by an insured.

When grappling with a designated-premises endorsement, claim professionals must consider both the nature of the insured’s premises and the nature of the insured’s business, which are not necessarily the same, write Duane and Rajbanshi. The crux of the analysis is assessing what is "necessary or incidental" to the designated premises, and not confusing business operations with activities related to the premises.

As explained by the authors, a slip-and-fall accident in an insured’s parking lot attached to the insured’s designated premises would likely be covered. However, events or activities conducted by the insured that have no necessary or incidental relationship to the designated premises is another matter, even if related to business operations. For example, planning at the premises for offsite activities or events is not enough to bring claims arising from such activities within the coverage of a designated-premises endorsement.

Earlier this year, Duane and Rajbanshi successfully argued to a panel of the Massachusetts Appeals Court that a personal injury at an event sponsored by a restaurant miles away from its premises was precluded from coverage under a liability policy containing a designated premises endorsement.

About Taylor Duane

Taylor Duane is one of New England’s leading civil litigation law firms with offices in Boston and Providence. Its experienced trial attorneys appear regularly in the federal and state courts of Massachusetts, Rhode Island and Connecticut. The Providence Business News has named the firm as one of Rhode Island’s Best Places to Work for three consecutive years (2008-2010).