Consistent with the Commercial Division Advisory Council’s (“Advisory Council”) mission – i.e., to ensure that the Commercial Division serves as a globally-recognized forum for the adjudication of complex commercial disputes – the Council this summer proposed to amend the Commercial Division Rules (22 NYCRR § 202.70) to clarify the types of insurance-coverage cases that can be heard in the Commercial Division.
Currently, the Commercial Division Rules provide that the Commercial Division is permitted to hear insurance cases that involve “environmental insurance coverage” and “commercial insurance coverage,” provided that the required monetary threshold is met (22 NYCRR §§ 202.70(b)(9) & 202.70(b)(10)). However, this jurisdiction is limited by §§ 202.70(c)(2) & 202.70(c)(6) of 22 NYCRR, which exclude cases (i) “seeking a declaratory judgment as to insurance coverage for personal injury or property damage,” and (ii) “[f]irst-party insurance claims and actions by insurers to collect premiums or rescind non-commercial parties.”
In a memorandum, dated June 24, 2025, the Advisory Council states that these sections should be amended because “the current rules could be read to preclude the Commercial Division from considering certain complex commercial insurance…actions that should be heard in the Commercial Division.” The Advisory Council further highlighted recent Administrative Orders that precluded certain commercial insurance cases that properly fall within the jurisdiction of the Commercial Division – emphasizing the necessity for the proposed amendment (see e.g. Certain Underwriters at Lloyd’s, London v BASF Corp., Index No. 651150/2024 (Jan. 10, 2025) [declining to hear a dispute involving $316.5 million in coverage claims because the case involved a declaratory judgment excluded by 22 NYCRR 202.70(c)(2)]; Endurance Am. Ins. Co. v StoneX Commodity Sols., LLC, Index No. 653234/2022 (Oct. 20, 2022) [rejecting an application, on consent, to transfer to the Commercial Division a dispute involving coverage for over $11 million in lost grain under a cargo and storage policy held by a commodities trader because the subject insurance was not a “directors and officers” insurance policy within the meaning of 22 NYCRR §202.70(b)(10)]).
The Advisory Council’s proposal seeks to amend the language of the rule to add the following:
Section 202.70. Rules of the Commercial Division of the Supreme Court
* * *
(b) Commercial cases
(9) Insurance coverage related to environmental damage or mass torts; provided, however, that a case presenting the underlying claim will not be heard in the Commercial Division merely as a result of being the subject of the coverage action;
(10) Commercial insurance coverage including but not limited to coverage under policies insuring: (i) directors and officers; and (ii) liability, loss, or damage related to commercial property (including but not limited to cargo and stored property), commercial liabilities, errors or omissions, cyber activities, commercial representations or warranties, title to commercial property, and business interruption; provided, however, that a case presenting the underlying claim will not be heard in the Commercial Division merely as a result of being the subject of the coverage action;
* * *
(c) Non-commercial cases The following will not be heard in the Commercial Division even if the monetary threshold is met:
(2) Cases seeking insurance coverage that does not qualify as coverage for environmental damage or mass torts or commercial insurance coverage, as defined in paragraphs (9) and (10) of subdivision (b) of this section (for example, cases seeking insurance coverage for personal injury or property damage under individual homeowners or individual auto policies);
* * *
(6) Actions by insurers to collect premiums on or to rescind noncommercial policies; and
Public comments to the proposal were due on August 8, 2025. If adopted, this proposal will provide judges, counsel, and parties with clear guidelines on the types of insurance cases that the Commercial Division may entertain. Moreover, this proposal will ensure that complex commercial insurance cases will be adjudicated by Commercial Division judges with business-law expertise. Finally, beyond streamlining the assignment of coverage cases, the proposal will also “establish [New York] Commercial Division as a go-to venue for one of the most common types of complex corporate litigation,” including insurance-coverage litigation.
[View source.]
