This commentary discusses the case of Eastside Floor Supplies, Ltd. v. SCS Agency, Inc.,
No. 2024-01501, 2026 NY Slip Op 01488 (App. Div. 2d Dept. Mar. 18, 2026).
Facts of the Case
Plaintiffs in this case leased portable storage containers at their Manhattan premises, in which they stored business personal property. In May 2019, a fire damaged the property.
At the time of the fire, the plaintiffs were insured under a businessowners insurance policy issued by Hanover Insurance Company, which provided general coverage for business personal property and which included a specific extension for "Business Personal Property Temporarily in Portable Storage Units" (the "portable storage extension"). The portable storage extension limited coverage to property stored in portable storage units used at the premises for 90 days or fewer and capped recovery at $25,000.
The plaintiffs had leased the containers since 2015, and the leases required the plaintiffs to insure the containers. At the time of the loss, the containers had been in continuous use for more than 16 months.
Hanover paid for the damage to the containers and for business income loss, but denied coverage for the inventory stored inside, citing a policy limitation that only covered property stored in portable units for 90 days or fewer, with a $25,000 cap.
The Court's Ruling
The plaintiffs argued that the storage containers were "structures" and, therefore, the loss was covered under the general business personal property provision. The New York Supreme Court, Nassau County, initially agreed, granting summary judgment in favor of the plaintiffs.
The appellate court found that interpreting the containers as "structures" would render the portable storage extension meaningless, contrary to established contract interpretation principles. The court determined that the containers were portable storage units within the plain meaning of the policy, and because they had been in use for more than 90 days, the 90-day limitation applied. Hanover established its entitlement to judgment as a matter of law.
Conclusion
Contrary to the New York Supreme Court's determination, the plaintiffs did not establish their prima facie entitlement to judgment as a matter of law by contending that the inventory was covered as business personal property in a structure. Interpreting the storage containers as structures made the portable storage extension functionally inoperative, a result disfavored by principles of contract interpretation.
Also contrary to the plaintiffs' contention, the storage containers were portable within the ordinary meaning of the term and were used for temporary storage, and they, thus, qualified as "portable storage units" under the portable storage extension. It was undisputed that the storage containers had been in continuous use at the premises for more than 90 days before the loss. Accordingly, Hanover established, prima facie, that the limitation in the portable storage extension applied and barred coverage under the policy for the inventory.
The insurer's agreement to cover property in "temporary" storage—defined as 90 days—could not overcome the 90-day limitation by claiming the portable storage container was a structure. This was, obviously, a weak and inept argument. No coverage existed for loss to the contents of the containers by a clear and unambiguous contract condition.
The appellate court reversed the lower court's decision, holding that the loss to the plaintiffs' inventory was not covered under the policy due to the 90-day limitation in the portable storage extension.
Analysis
Insurance, as I have often said, is nothing more than a contract. The fact that the insurer agreed to cover property in "temporary" storage—defined as 90 days—could not overcome the limitation by claiming the portable storage container was a structure, obviously, was a weak and inept argument. There was no coverage for loss to the contents of the containers by a clear and unambiguous contract condition.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.
This commentary discusses the case of Eastside Floor Supplies, Ltd. v. SCS Agency, Inc., No. 2024-01501, 2026 NY Slip Op 01488 (App. Div. 2d Dept. Mar. 18, 2026).
Facts of the Case
Plaintiffs in this case leased portable storage containers at their Manhattan premises, in which they stored business personal property. In May 2019, a fire damaged the property.
At the time of the fire, the plaintiffs were insured under a businessowners insurance policy issued by Hanover Insurance Company, which provided general coverage for business personal property and which included a specific extension for "Business Personal Property Temporarily in Portable Storage Units" (the "portable storage extension"). The portable storage extension limited coverage to property stored in portable storage units used at the premises for 90 days or fewer and capped recovery at $25,000.
The plaintiffs had leased the containers since 2015, and the leases required the plaintiffs to insure the containers. At the time of the loss, the containers had been in continuous use for more than 16 months.
Hanover paid for the damage to the containers and for business income loss, but denied coverage for the inventory stored inside, citing a policy limitation that only covered property stored in portable units for 90 days or fewer, with a $25,000 cap.
The Court's Ruling
The plaintiffs argued that the storage containers were "structures" and, therefore, the loss was covered under the general business personal property provision. The New York Supreme Court, Nassau County, initially agreed, granting summary judgment in favor of the plaintiffs.
The appellate court found that interpreting the containers as "structures" would render the portable storage extension meaningless, contrary to established contract interpretation principles. The court determined that the containers were portable storage units within the plain meaning of the policy, and because they had been in use for more than 90 days, the 90-day limitation applied. Hanover established its entitlement to judgment as a matter of law.
Conclusion
Contrary to the New York Supreme Court's determination, the plaintiffs did not establish their prima facie entitlement to judgment as a matter of law by contending that the inventory was covered as business personal property in a structure. Interpreting the storage containers as structures made the portable storage extension functionally inoperative, a result disfavored by principles of contract interpretation.
Also contrary to the plaintiffs' contention, the storage containers were portable within the ordinary meaning of the term and were used for temporary storage, and they, thus, qualified as "portable storage units" under the portable storage extension. It was undisputed that the storage containers had been in continuous use at the premises for more than 90 days before the loss. Accordingly, Hanover established, prima facie, that the limitation in the portable storage extension applied and barred coverage under the policy for the inventory.
The insurer's agreement to cover property in "temporary" storage—defined as 90 days—could not overcome the 90-day limitation by claiming the portable storage container was a structure. This was, obviously, a weak and inept argument. No coverage existed for loss to the contents of the containers by a clear and unambiguous contract condition.
The appellate court reversed the lower court's decision, holding that the loss to the plaintiffs' inventory was not covered under the policy due to the 90-day limitation in the portable storage extension.
Analysis
Insurance, as I have often said, is nothing more than a contract. The fact that the insurer agreed to cover property in "temporary" storage—defined as 90 days—could not overcome the limitation by claiming the portable storage container was a structure, obviously, was a weak and inept argument. There was no coverage for loss to the contents of the containers by a clear and unambiguous contract condition.
© Barry Zalma 2026
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.