Insurance Company “Cutz” Barbershop’s Defense


Scottsdale Insurance Company v. Cutz, LLC (Florida)
(Insurer Had No Duty to Defend Lessor of Premises in Negligent Security Lawsuit.)

In September 2003, two men were shot to death at a Cutz, LLC (Cutz) barbershop. Personal representatives of the deceased men brought suit against Cutz (the lessee) and G&G Laboratories (the lessor of the premises), seeking damages for wrongful death and negligence based upon a failure to provide security at the barbershop. Cutz was the named insured under an insurance policy issued by Scottsdale Insurance Company (Scottsdale). Both Cutz and G&G Laboratories (G&G) tendered their defense and requested indemnity from Scottsdale. Scottsdale sought a declaration from the Court that it was not responsible for G&G.

Those named in the policy as additional insureds included “operators” of the property, although the term “operator” was not defined in the policy itself. In the insurance application Cutz had used “operators” to refer to its employees. G&G argued it was an operator of the premises, akin to the employees of Cut, but the Court rejected the argument. The Court indicated that G&G could not be considered an “operator” simply because it considered the property one of its principle places of business.

NOTE: This case is an important reminder to facility owners. If facility owners lease out all of (or portions of) their premises, they should be sure that the proper and appropriate insurance protection is in place. They should not simply rely on the lessee to procure the necessary protections. Lease agreements should specifically include indemnity provisions and they should specifically require that the facility owners be added as additional insureds and provided copies of all applicable policies including declarations and endorsements. Typically, lease agreements require the lessee to provide a certificate of insurance as evidence of insurance coverage. However, certificates are not considered part of the policy itself, and they can include errors and/or they can be manipulated. As such, it is best to obtain complete copies of policies where possible.

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