In Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc. (No. C082841; filed 12/31/19, ord. pub. 1/28/20), a California appeals court held that a binding arbitration clause in an insurance policy extends to a third party, such as an additional insured.
In Philadelphia v. SMG, Philadelphia issued a general liability policy to a youth organization, Future Farmers of America (FFA), that had contracted to use the Fresno Convention Center for its annual convention. The contract required FFA to obtain liability insurance and to name the property manager, SMG, and the City of Fresno, as additional insureds. Philadelphia issued FFA a commercial lines CGL policy with an endorsement affording coverage to “managers, landlords, or lessors of premises” for “liability arising out of the ownership, maintenance or use of that part of the premises leased or rented” to the named insured. It also covered “any person or organization where required by a written contract executed prior to the occurrence” but only for liability arising from the named insured’s negligence.
Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP
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