SDV Insights

Fourth Circuit Uses Extrinsic Evidence to Expand Coverage

The US Court of Appeals for the Fourth Circuit recently reminded policyholders of two important lessons regarding additional insured coverage:

First, where the endorsement provides coverage for the additional insured “but only with respect to liability for …’property damage’…caused in whole or in part by…the [Named Insured’s] acts or omissions,  or the acts or omissions of those acting on the [Named Insured’s] behalf,” the coverage afforded is not limited to the additional insured’s vicarious liability.

Second, under Maryland law, an insured may utilize extrinsic evidence outside of the allegations of the complaint to establish a potentiality of coverage under an insurance policy.

Remembering these important concepts will help additional insureds to maximize available coverage.

Capital City Real Estate LLC v. Certain Underwriters At Lloyd’s, London, case number 14-1239


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