Coverage Pointers - Volume I, No. 15

For those interested in following HOT CASES from other jurisdictions covering a broad range of legal issues, visit the HOT CASES section of the Federation of Insurance and Corporate Counsel website:



New York State Supreme Court, Appellate Division, Second Department

Disclaimer not Required Where Policy Lacks Coverage

In an action to permanently stay arbitration of an uninsured motorist claim (UM), the Court held that the insurer was not required to provide timely notice of disclaimer where the clear and unambiguous language of the policy endorsement indicated UM coverage did not extend to the claimant. No prompt disclaimer is required where the policy expressed a lack of coverage.



New York State Supreme Court, Appellate Division, First Department

Assault Committed by Insured’s Employee Deemed Occurrence under Liability Policy -- Employee was not Acting within Scope of Duties or on Insured’s Behalf

The insureds, a residential cooperative and its managing agent, sought defense and indemnification in an underlying action alleging its superintendent assaulted a tenant of the building. The insurer disclaimed coverage on the ground that assault was not an "occurrence" under the policy. The court disagreed, holding that, since the superintendent was not acting within the scope of his duties or on behalf of the insured when committing the assault, the incident was not intended or expected from the insured’s standpoint, i.e., it was an accident. As such, it was an occurrence under the policy and the insurer was obligated to defend and indemnify the insureds in that action.


01/13/00: SELLITTO v. CASEY

New York State Supreme Court, Appellate Division, Third Department

Serious Injury Threshold: Physician’s and Psychologist’s Affidavits Fall Short on Proof of Significant Limitation but Support Claim under 90/180-day Category of Insurance Law

Plaintiff commenced this action for personal injuries following an auto accident, alleging multiple injuries to her shoulder, arm, neck, cervical spine, lumbar spine and mental capacity. Defendants sought summary dismissal on the ground that plaintiff did not sustain "serious injury" as required by Insurance Law § 5102 (d). The court found the affidavit of her physician, who diagnosed cervical and lumbar strain, muscle spasms, supraspinatus strain, injury to left rotator cuff and degenerative changes to C4-5 and C5-6, was not sufficient to establish a "significant limitation of use of a body function or system." The physician did not attribute a causal connection between the accident and degenerative changes to plaintiff’s cervical spine. Moreover, he stated that she had regained 90% range of motion to her left shoulder – a 10% loss is not a significant limitation. The affidavit of plaintiff’s psychologist, who diagnosed post traumatic stress disorder (with symptoms of disturbed sleep cycles and flashbacks) also failed to establish a "significant limitation" under the statute. Nevertheless, these affidavits, together with plaintiff’s own affidavit describing changes in her lifestyle following the accident, (including a two-day emergency room visit and three weeks off from work), were sufficient to raise issues of fact whether she suffered a medical impairment which prevented her from performing her usual and customary activities for 90 out of 180 days following the accident.



New York State Supreme Court, Appellate Division, Second Department

Customary Hours of Operation Deemed "Business Hours" under Policy Exclusions

The insured operated a coin dealership from his home, and was insured under a coin dealer policy. On November 16, 1994, at approximately 1:00 p.m., several men entered the home while the insured was out, subdued his father, and stole the coin inventory, which was located in the attic. The insurer disclaimed coverage under the policy on the basis that the theft occurred during non-business hours and the coins were not in a safe, as required in the policy. The policy excluded coverage for "loss by theft for more than $10,000 of property not kept in a locked safe or vault during any non-business hours." The policy also required that any protection provided for the safety of insured property "shall be in use at all times out of business hours." However, the policy did not define "business hours" or "non-business hours". The court found the policy exclusions inapplicable because the theft occurred during what is commonly understood to be the business day, and during the insured’s customary hours of operation. Moreover, while the insured was not at home at the time of the theft, his father, who participated in the business, was present.




From time to time we highlight significant cases of interest from other jurisdictions. This week we offer decisions from Kansas and South Carolina:


Kansas Court of Appeals

Business Liability Policy may Cover Claims for Attorney General’s Enforcement of Consumer Protection Statute, but Claims for Civil Penalties Excluded by Public Policy

While provisions of policy do not, per se, exclude actions by State’s Attorney General against company alleged to have violated consumer protection statutes, each claim must be individually evaluated. A claim for unauthorized practice of law is not a claim for bodily injury or property damage and claim of deceptive act, which included "the willful use, in any oral or written representation, of exaggeration, falsehood, innuendo or ambiguity as to a material fact," does not fall within coverage grant. Violations of statute which speak to "disparaging the property, services or business of another by making, knowingly or with reason to know, false or misleading representations of material facts," may be covered by advertising injury provisions; however, since the damage claims were penal in nature, and Kansas does not allow insurance for punitive damages, no coverage afforded.


United States Court of Appeals for the Fourth Circuit (South Carolina Law)

"Known Loss" Doctrine Bars Claims under Policy only where Insurer Demonstrates the Insured Knew it was Legally Liable for Property Damage when Policy went into Effect or Knew Liability was Substantially Certain to Occur

In construction defect case, evidence that insured received notice that owners’ association intended to hold it legally liable for defects in construction does not establish the insured knew it was legally liable or that liability was substantially certain to occur. Moreover, the owners’ association’s filing of a suit against the insured prior to the effective dates of the second policy did not trigger application of the "known loss" doctrine.

No-Fault Regulation Amendments
Effective February 1, 2000

Unless the Superintendent of Insurance or a court intervenes, the long-awaited amendments to the New York State No-Fault regulations will go into effect on February 1, 2000. Promulgated in October, the revisions are to 11 NYCRR 65 (Regulation 68).


The Insurance Department’s description of the changes follows. Should you need a copy of the regulation, we have created a link to the Insurance Department site, where you will find it in .pdf format.

The existing regulation is being repealed and a new regulation promulgated in order to eliminate those provisions that apply solely to accidents that occurred prior to December 1, 1977. The new regulation has been reorganized in a logical manner to make it easier to locate various subjects. All provisions relating to Managed Care Coverage, which may no longer be offered, have been deleted. In addition, the following specific substantive changes, which are classified in five general categories, were introduced:

(A) policy conditions,
(B) no-fault claim processing provisions,
(C) optional arbitration procedures,
(D) mandatory arbitration procedures, and
(E) no-fault forms.
  1. Policy conditions:


(2) Proof of claim medical, work loss, and other necessary expenses. Sections 65-1.1 and 65-2.4 reduce from 180 days to 45 days the proof of claim period permitted for the submission of claims for health care services rendered. Under the current 180 day period, claims for services that were rendered months before notification of such treatment was received by the insurer cannot be reasonably verified by the insurer and make it difficult for the insurer to fairly evaluate the necessity of that treatment. This change would enable insurers to more promptly examine no-fault claims.


Additionally, the existing regulation requires that proof of claim for work loss benefits be submitted as soon as reasonably practicable. The new regulation would require that such proof be submitted within 90 days after the work loss is incurred. This would establish a reasonable fixed time period for the submission of such proof, and would enable insurers to properly evaluate no-fault claims.


Under the existing regulation, in order to be relieved for a failure to comply with the filing requirements for notice of claim or proof of claim, the applicant must demonstrate that it was impossible to comply with the time requirements. Under the new regulation, the applicant would be required to demonstrate clear and reasonable justification for the failure to comply. Accordingly, those who can demonstrate a reasonable basis for non-compliance with the time requirements would be held to an "as soon as reasonably possible standard" for providing notice.


Finally, most coverages currently provide insurers with the right to conduct an examination under oath, which may be requested when a claim is suspect. The new regulation would specifically allow an insurer to require an examination under oath when warranted. By including the right to examination under oath, insurers and self-insurers will be given an effective tool to combat fraud and abuse.

(B) No-fault claim processing provisions:

(1) Examination under oath. Section 65-3.5(d) would adopt the same rules for examination under oath that are currently applicable to a medical examination requested by the insurer. These rules require the examination to be scheduled within 30 days of the receipt of prescribed verification forms and to be held at a place and time reasonably convenient to the insured. In addition, the insurer is required to inform the applicant that he or she will be reimbursed for any loss of earnings and transportation expenses incurred.


(2) Facsimile and electronic data transmittal of claims information. Section 65-3.5(j) would add a new requirement that insurers that write more than 1,000 motor vehicle liability policies in New York would be required to establish procedures for the receipt of claims information by facsimile or electronic data transmittal. This provision would enable applicants to more easily demonstrate that they have met the new notice requirements and also allow for more rapid processing of claims.


(3) Interest on overdue payments. Section 65-3.9(a) changes the method of calculating interest on overdue payments. Currently insurers are required to pay interest at a compound rate of 2% per month on all overdue payments. The regulation would be changed to require the payment on a simple interest basis. The penalty was introduced in the 1970’s, when inflation and interest rates were much higher than they are today. This change will reduce the penalty somewhat while maintaining its effectiveness in deterring late payment of claims.


(4) Attorneys fees. Section 65-3.10(a) changes the fees paid to the applicant’s attorney when a claim is overdue or denied. Currently, insurers are required to pay the applicant’s attorney’s fee when a claim is overdue or denied. The current attorney fee structure, by limiting the amount of the attorney’s fee for collection prior to arbitration to the amount of interest on an overdue claim, encourages attorneys to file for arbitration to collect overdue bills and the higher applicable attorney’s fee, rather than to communicate with the insurer in an attempt to collect those bills. The new regulation would increase the attorney’s fee payable, prior to arbitration, to 20% of the amount of the overdue bill plus any interest subject to a maximum payment of $60. This change should encourage attorneys to settle claims with insurers prior to initiating a costly arbitration procedure. Furthermore, the minimum attorney’s fee for a denied bill would be increased from $60 to $80, providing an inducement for the attorney to secure a denial of claim form, which clearly defines the insurer’s position.


Section 65-3.10(b) changes the method of collecting an additional attorney’s fee paid to the applicant’s attorney if a dispute is resolved in accordance with any of the optional arbitration procedures and if payment is not made by the insurer within 30 days following such resolution. The existing regulation provides that in such instances, the fee is payable only after a complaint to the Insurance Department. Section 65-3.10(b) would be changed to provide for the payment of the additional fee after 45 days have elapsed and only after the request has been made to the insurance company rather than the Insurance Department. This change should encourage attorneys to attempt to enforce payment of overdue awards and conciliated disputes prior to contacting the Insurance Department.


(5) Direct Payments: Section 65-3.11 would be changed to limit the assignment of No-Fault benefits to the injured person’s licensed health care provider or employer. This will result in coverage for other necessary expenses being limited to out-of-pocket expenses and should reduce abuse by those who have demonstrated an ability to exploit this component of the No-Fault benefit package.


(6) Explanation of Benefits: Section 65-3.17 has been added to require insurers to provide an Explanation of Benefits to the eligible injured person and that person’s attorney. While most insurers would likely meet the standard established, there may be some who would not. This advice should provide an effective tool to combat fraud and abuse.


(C) Optional arbitration procedures:

(1) Initiation of Optional Arbitration Procedures: Section 65-4.2(a) of the proposed regulation would require applicants for no-fault arbitration to file a duplicate copy of the appropriate form to facilitate the processing of arbitration requests.


(2) Initial review by the Insurance Department: Section 65-4.3(e) has been added to provide that an insurer may make a non-binding written offer to settle the dispute prior to transmittal to an arbitration forum. If that offer is not accepted by the applicant and if an arbitration proceeding becomes necessary, Section 65-4.7(e) limits the attorney’s fee payable by the insurer to $60, the amount payable for conciliated disputes, if the amount offered by the insurer equaled or exceeded the amount awarded by the arbitrator. This will encourage conciliation by eliminating a financial incentive, in the form of a higher attorney’s fee, if the matter proceeds to arbitration.


(3) Evidence: Section 65-4.5(e) and 65-4.6(n)(1) clarify the broad authority given to arbitrators to resolve disputes. The new provisions state clearly that a no-fault arbitrator may affirmatively seek any information and raise any issue deemed necessary to render decisions consistent with the Insurance Law and Department regulations to further the purpose of the No-Fault system. This change applies to both Insurance Department Arbitration (IDA) and American Arbitration Association (AAA) arbitrations.


(4) Notice: Section 65-4.6(a) would provide for the resolution of disputes subject to AAA arbitration through written submissions by the parties if the amount of the dispute is less than $2,000. However, the arbitrator is given the discretion to require a hearing if deemed necessary. Since virtually all AAA arbitrations are currently decided only after a formal hearing, this change should enable smaller disputes to be resolved in a fair, yet more rapid and efficient manner, with a consequent cost saving to the reparations system.


(5) Limitation on attorney’s fees: Section 65-4.7(b)(1) increases the minimum attorney’s fee from $60 to $80 with respect to denied claims to conform with the change in Section 65-3.10(a).


(D) Mandatory arbitration procedures:

(1) Inter-company arbitration procedures: Section 65-4.12(d) would allow Arbitration Forums to establish inter-company arbitration procedures with the superintendent’s approval. Since Section 5105 states that these procedures can be either "...promulgated or approved by the superintendent", the regulation would be amended to permit the procedures to be "...established by Arbitration Forums and approved by the superintendent." This change in Section 65-4.12(d) would simplify the administration of these arbitrations and reduce the degree of regulation.


(2) Filing assessments: The existing regulation provides for the payment of the filing assessment when a case is closed. New Section 65-4.12(e)(2) would provide for the payment of inter-company arbitration assessments upon filing. This change should allow for a more efficient operation by simplifying Arbitration Forums’ collection processes.


(E) No-fault forms:

(1) The form " Verification of Treatment by Attending Physician or Other Provider of Health Service" (Form NF-3) has been updated to incorporate additional information that will enable insurers to verify claims. In addition, an authorization to pay the provider directly and an assignment of benefits have been incorporated into the form. All of the no-fault claims forms have been changed to include the revised fraud warning contained in Part 86. Additionally, changes have been made to update and reformat some of the forms.


(2) Costs: The regulation requires insurers and self-insurers (including local governments that are self-insurers) to duplicate and use revised Personal Injury Protection endorsements and no-fault claims forms, as well as being capable of receiving claims information by facsimile or electronic data transmittal. These requirements are the only new costs imposed by this regulation. Insurers will be required to submit to the Superintendent, for his approval, policy forms containing the revised policy provisions required by this part. The compliance schedule for the newly proposed regulation will allow insurers and self-insurers to amend their existing stocks of claims forms, by the use of labels; thus, additional duplication costs should be minimal. The cost of a facsimile machine to comply with this regulation is nominal since most, if not all insurers and self-insurers, already have such machines. These costs should be more than offset by the anticipated improvement in operational efficiency, and reduction in fraud and abuse.


(3) Local government mandates: Local governments that are self-insurers will be required to establish procedures for the receipt of claims information by facsimile or electronic data transmittal. In addition, they will have to create new claims forms to comply with the proposed regulation and a new attorney fee schedule will have to be complied with. There is no other cost imposed on state or local governments.


(1) Notice. Sections 65-1.1 and 65-2.4 reduce from 90 days to 30 days the written notice of accident requirement permitted an injured party. The existing 90-day period of time permits no-fault claimants the opportunity to build up substantial health care bills before the insurer receives notice of a claim that might enable it to fairly evaluate the extent of a claimant’s injuries and the medical necessity for treatment. The reduction to 30 days would enable insurers to more effectively evaluate no-fault claims, while still giving the claimant a reasonable period to give notice.

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In an action to recover damages for breach of an insurance contract, the defendant appeals from an order and judgment (one paper) of the Supreme Court, Queens County (Thomas, J.), dated December 10, 1998, which, upon granting the plaintiff's motion for summary judgment on the complaint and denying its cross motion for summary judgment dismissing the complaint, is in favor of the plaintiff and against it in the principal sum of $75,000.

ORDERED that the order and judgment is affirmed, with costs.

The plaintiff, who operated a coin dealership from his residence, purchased a coin dealer insurance policy from the defendant. On November 16, 1994, at approximately 1:00 P.M., several men entered the plaintiff's residence while he was out, subdued his father, and stole his coin inventory , which was located in the attic. The defendant disclaimed coverage on the basis that the theft had occurred during non-business hours, and the coins were not in a safe during that time, as required by the policy. The plaintiff commenced this action to recover damages for breach of contract.

It is well settled that the construction of terms and conditions of an insurance policy that are clear and unambiguous presents a question of law to be determined by the court when the only issue is whether the terms as stated in the policy apply to the facts (see, Dubay v Trans-America Ins. Co., 75 AD2d 312). However, it is equally well settled that "where the provisions of the policy are clear and unambiguous, they must be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement" ( GEICO v Kligler, 42 NY2d 863, 864).

Here, section 5(J) of the policy excludes coverage for "[l]oss by theft for more than $10,000 of property not kept in a locked safe or vault during any non-business hours". In addition, pursuant to section 9(A), the plaintiff agreed that any protection provided for the safety of the insured property "shall be in use at all times out of business hours". The policy does not define the terms "non-business hours" or "business hours".

"Business hours" has been defined as "those hours during which persons in the community generally keep their places open for the transaction of business" ( Casalduc v Diaz, 117 F2d 915, 916, cert denied 314 US 639). Here, the theft occurred during the middle of what is commonly understood to be the business day, and certainly during the middle of the plaintiff's customary hours of operation from 10:00 A.M. to 6:00 P.M. The fact that the plaintiff was not home is immaterial since the plaintiff's father, who also participated in the running of the business , was present. Thus, neither section 5(J) nor section 9(A) of the policy are applicable.

Furthermore, contrary to the defendant's contention, the provision of section 9(A) requiring the coins to be protected "when the insured's premises are left unattended" is inapplicable since the plaintiff 's father was present on the premises at the time of the theft.

The defendant's remaining contentions are either unpreserved for appellate review or without merit.



Cardona , P.J.

Appeal from that part of an order of the Supreme Court (Keniry, J.), entered October 13, 1998 in Saratoga County, which partially denied defendants' motion for summary judgment dismissing the complaint.

On April 23, 1995, plaintiff was involved in an accident on Interstate Route 81 in Oswego County when the automobile she was driving was struck twice from behind by a vehicle owned by defendant F & R Safety Products Inc. and operated by defendant James L. Casey . Thereafter, plaintiff commenced this personal injury action and, in her bill of particulars, alleged injuries to her left shoulder, left arm, left hand, neck, cervical spine, lumbar spine and mental capacity constituting "serious injury" under the four categories set forth in Insurance Law § 5102 (d). Defendants moved for summary judgment dismissing the complaint and Supreme Court, upon finding the absence of permanent injury, partially granted the motion and dismissed plaintiff's claims premised upon a permanent loss of use of a body organ, member, function or system and a permanent consequential limitation of use of a body organ or member. The court, however, declined to dismiss plaintiff's claims based upon a significant limitation of use of a body function or system or a medically determined injury or impairment preventing plaintiff from performing substantially all of the material acts which constituted her usual and customary daily actions for not less than 90 days of the 180-day postaccident period. Defendants appeal from that part of Supreme Court's order denying their motion in its entirety.

We note that defendants had the initial burden of demonstrating that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d) (see, Gaddy v Eyler, 79 NY2d 955, 956-957; Weaver v Derr, 242 AD2d 823, 824). Defendants submitted medical proof which disclosed, inter alia, the absence of any abnormalities in plaintiff's cervical spine or chest following the accident or any medical limitations on her activities, and that she had regained the full range of motion in her cervical spine without spasm or tenderness. In our opinion, defendants' proof was sufficient to shift the burden to plaintiff to put forth competent medical evidence supporting her claim (see , Boehm v Estate of Mack, 255 AD2d 749, 750; Evans v Hahn, 255 AD2d 751, 751).

Turning first to the category of significant limitation, "the law requires the limitation of use to be more than minor, mild or slight" ( Lanuto v Constantine, 192 AD2d 989, 991, lv denied 82 NY2d 654). In addition, it must be based upon more than the plaintiff's subjective complaints of pain (see, Paternoster v Drehmer, 260 AD2d 867, 868). Rather, it "must be supported by medical proof based upon credible medical evidence of an objectively measured and quantified medical injury or condition " (Lanuto v Constantine, supra, at 991).

In opposition to the motion , plaintiff submitted the affidavit of her treating physician, Kenneth Schwartz, who diagnosed plaintiff with cervical and lumbar strain, muscle spasms, left supraspinatus strain and an injury to the left rotator cuff. He averred that X rays of plaintiff's spine disclosed the presence of degenerative changes to C4-5 and C5-6. He stated that he prescribed ibuprofen and referred her to physical therapy. Schwartz indicated that he did not restrict plaintiff's work but directed her to curtail any activities requiring lifting. He stated that by October 1995 she was not experiencing further spasm or tenderness and had regained 90% range of motion in her left shoulder. He opined that plaintiff was significantly disabled for 120 days after the accident and will suffer permanently, although her condition has improved to the point where she is no longer significantly disabled.

Plaintiff also submitted the affidavit of Cal Regula, a psychologist who began treating her in September 1995 for posttraumatic stress disorder which he averred was caused by the accident. According to Regula, plaintiff experienced symptoms such as disturbed sleep cycle and flashbacks which significantly affected her lifestyle, causing her to reduce her driving and become socially isolated. He indicated that he treated plaintiff on 29 occasions and, while she had progressed, she had not completely recovered. He opined that plaintiff' s sleep disruption, social isolation and flashbacks significantly impaired her daily activities for a period of seven months after the accident.

In our view, the foregoing evidence is insufficient to establish that plaintiff suffered a significant limitation of use of a body function or system. Schwartz did not specifically attribute a casual connection between the accident and the degenerative changes in plaintiff's cervical spine. He indicated that, as of October 1995, plaintiff experienced a 10% loss of the range of motion in her left shoulder. This is not a significant limitation (see, e.g., Morgan v Beh, 256 AD2d 752, 753; Hemmes v Twedt, 180 AD2d 925, 926). Moreover, while a mental or emotional impairment may in certain circumstances constitute a "significant limitation of use of a body function or system& quot; under Insurance Law § 5102 (d) (see, Cushing v Seemann, 247 AD2d 891, 892; Spinrad v Gasser, 235 AD2d 687, 688), Regula's affidavit fails to provide that objectively measured quantum of evidence necessary to satisfy this category of serious injury (see, Lanuto v Constantine, 192 AD2d 989, 991, supra). Therefore, defendants' motion should have been granted as to plaintiff's alleged injuries under the significant limitation category.

We reach a different conclusion, however, with respect to the 90/180-day category. On this issue, it was incumbent upon plaintiff to "present credible medical evidence that an injury or impairment was sustained * * * [that] was the cause of her claimed disability for the applicable period " (Lanuto v Constantine, supra, at 991 [citation omitted]). She was further required to demonstrate that she "has been curtailed from performing [her] usual activities to a great extent rather than some slight curtailment" ( Licari v Elliot, 57 NY2d 230, 236; see, Gaddy v Eyler, supra, at 958). Plaintiff submitted her own affidavit in which she related the changes in her lifestyle since the accident . She averred that she was treated in the emergency room two days after the accident and missed three weeks of work. She stated that Schwartz referred her to physical therapy which she attended for 24 weeks. She indicated that, although she continued to drive from her home in Saratoga County to her job in Albany County and to her physical therapy appointments, she experienced anxiety attacks when driving . She averred that, while undergoing physical therapy, she was unable to do yard or house work consisting of mowing, raking, weeding, laundry, vacuuming, cooking, dusting, cleaning and walking her dog and that, since the accident, she has curtailed many of the activities she previously enjoyed such as fishing , bowling, dancing and traveling.

As previously noted, Schwartz imposed upon plaintiff a restriction upon lifting and opined that she was significantly disabled for 120 days following the accident. In addition, Regula averred that the posttraumatic stress disorder significantly affected plaintiff's lifestyle causing her to avoid driving and social situations and that plaintiff's daily activities were impaired for seven months after the accident. In our view, plaintiff's affidavit, together with the affidavits of Schwartz and Regula, are sufficient to raise questions of fact concerning whether plaintiff suffered a medical impairment which prevented her from performing her usual and customary activities for 90 out of the 180 days following the accident. Therefore, Supreme Court properly declined to grant defendants' motion for summary judgment dismissing plaintiff's action alleging serious injury under that category.

Mercure, Spain, Carpinello and Graffeo, JJ., concur.

ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as denied that part of defendants' motion for summary judgment dismissing plaintiff's complaint alleging serious injury under the category of a significant limitation of use of a body function or system; motion granted to that extent and summary judgment awarded to defendants dismissing said claim; and, as so modified, affirmed.


Order, Supreme Court , New York County (Jane Solomon, J.), entered on or about February 3, 1999, which, upon the parties’ respective motions for summary judgment, declared that defendant insurer is obligated to defend and indemnify plaintiffs insureds, a residential cooperative and its managing agent, in an underlying action arising out of an assault by plaintiffs’ employee, the superintendent of the building, on a tenant/shareholder , unanimously affirmed, without costs.

Since plaintiff’s employee was not acting within the scope of his duties or in any manner on plaintiffs’ behalf when he committed the assault, the incident was not intended or expected, i.e., it was an accident, from plaintiffs’ standpoint, and therefore a covered occurrence under the policy (see, Agoado Realty Corp. v United Intl. Ins. Co., __AD2d__, 1999 NY App Div 1235 8). We note that the subject policy, unlike those in the cases on which defendant relies, does not contain a provision specifically excluding from coverage claims arising from or based on an assault (see , Mt. Vernon Fire Ins. Co. v Creative Hous., 88 NY2d 347; U.S. Underwriters Ins. Co. v Val-Blue Corp., 85 NY2d 821).



In a proceeding to permanently stay arbitration of an uninsured motorist claim, the petitioner appeals from an order of the Supreme Court, Nassau County (Lally, J.), dated November 9, 1 998, which denied the petition and dismissed the proceeding.

ORDERED that the order is reversed, on the law, with costs, the petition is granted, and the arbitration is permanently stayed.

Contrary to the conclusion reached by the Supreme Court, the petitioner was not required to provide a timely notice of disclaimer of coverage. Pursuant to the clear and unambiguous language of the policy endorsement, uninsured motorist coverage did not extend to the respondent. The policy language expressed a lack of coverage for which no prompt disclaimer was required. Accordingly , the petitioner cannot be compelled to arbitrate a claim which the parties never agreed to arbitrate and for which no coverage was provided (see, Matter of Worcester Ins. Co. v Bettenhauser, 260 AD2d 488).


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