When a business applies for insurance, it is important to pay attention to details. Among other things, an insured needs to list all of the entities for which the business needs coverage. The Court of Appeals' recent decision in West Coast Pizza Co., Inc. v. United Nat. Ins. Co. (Div. I December 12, 2011) makes this point abundantly clear.
The coverage dispute stemmed from a car accident involving a delivery driver from a Mad Pizza restaurant. The business owners also operated about 20 Domino's franchises through a separate corporation, West Cost Pizza, Inc. and, when they had purchased insurance for their businesses, they listed only West Coast Pizza as an entity to be insured. Consistent with the application, the insurer, United National Insurance Company, issued a policy that listed West Coast Pizza as the only insured.
After United National denied coverage for the Mad Pizza accident, the owners sued through West Coast Pizza, and argued that they had intended to obtain coverage for all of their pizza restaurants as evidenced by the the fact that their insurance application estimated the number of drivers employed across all of their outlets.
The trial court and Division I both found that the insurer was entitled to summary judgment. Division I reasoned that the policy unambiguously limited coverage to West Coast Pizza. Division I also rejected the owners' mutual mistake theory, finding that their was no evidence that United National had intended to insure both entities. In particular, the court pointed out that the application provided no information from which United National could have determined that the applicant had intended to insure their Mad Pizza restaurants as well as their Domino's franchises.