Dueling policy provisions leaves landlord exposed.

Two individuals attending a hip-hop concert at a nightclub were shot by an unknown assailant, and one of whom was killed. The injured party and the decedent’s estate brought a lawsuit against the property owner and the tenant nightclub alleging negligence in failing to provide adequate security. Both defendants held policies of insurance with assault and battery exclusions. The nightclub’s policy language contained an explicit exclusion for assault arising out of negligent hiring or supervision, whereas the landlord’s policy did not expressly exclude claims for negligent hiring or supervision where the underlying operative facts constituted assault or battery. Strictly construing the policy language, the court found that the nightclub’s policy clearly indicated to the average reader that claims for negligent hiring, supervision, retention or inadequate crowd control would be excluded from coverage, whereas there was no clear indication that the same would be true under the landlord’s policy. Coverage was found to exist under the landlord’s policy only, demonstrating the need for explicit policy language due to the narrow interpretation courts apply to policy exclusions. The court also dismissed claims against both insurance companies for breaching a duty to ensure that adequate insurance coverage was procured for the insureds, finding that there is no such duty recognized under New Jersey law.

_{Case Law Alerts, 1st Quarter, January 2016}

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