The state Court of Appeals said yesterday it has accepted a certified question from the U.S. Court of Appeals for the Second Circuit to clarify whether insurance for vandalism covers reckless, damaging acts that were not directed at the insured property. The circuit concluded that New York case law is not clear whether an act that indirectly causes damage to a building is considered malicious and willful for the purposes of qualifying for insurance coverage for vandalism.
At issue in Georgitsi Realty v. Penn-Star Insurance, 58, is whether Penn-Star Insurance is bound to cover damage sustained at a Brooklyn building owned by Georgitsi Realty due to the excavation work for an underground parking lot in an adjoining building. A circuit panel sent the Court of Appeals the question when deciding last month that it could not decide the matter based on varying interpretations in New York case law of whether damage caused indirectly qualifies as the “willful and malicious” infliction of vandalism (NYLJ, Dec. 24). The state court is likely to hear the case late this year.