{"id":904485,"date":"2025-06-24T15:43:09","date_gmt":"2025-06-24T21:43:09","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=904485"},"modified":"2025-06-24T15:43:14","modified_gmt":"2025-06-24T21:43:14","slug":"construction-delay-insurance-dispute-over-rental-income","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-delay-insurance-dispute-over-rental-income\/","title":{"rendered":"Eighth Circuit Affirms Summary Judgment to Insurer in Dispute with Construction Project Owner Over Lost Rental Income"},"content":{"rendered":"\n

Jennifer Luther | Foley & Lardner<\/a><\/p>\n\n\n\n

On Monday, June 9, 2025, the Eighth Circuit Court of Appeals ruled that a Missouri real estate developer could not recover insurance proceeds for lost rental income arising out of a retaining wall failure that caused delays<\/a> in the construction of an apartment building project.\u00a0<\/p>\n\n\n\n

In\u00a0BCC Partners, LLC v. Travelers Property Casualty Company of America<\/em><\/a>, the Eighth Circuit affirmed the district court\u2019s grant of summary judgment to Travelers Property Casualty Company of America (\u201cTravelers\u201d) in a dispute over insurance coverage. The coverage dispute arose out of BCC Partners, LLC\u2019s (\u201cBCC\u201d) June 2015 contract with Ben F. Blanton Construction, Inc. (\u201cBlanton\u201d) for the construction of an apartment complex in Missouri called the Vue Project. Under the contract, the builder, Blanton, was required to purchase insurance. Blanton obtained a policy with Travelers pursuant to which Blanton was a \u201cNamed Insured\u201d and the developer, BCC, was an \u201cAdditional Named Insured.\u201d\u00a0<\/p>\n\n\n\n

In December 2015, in the midst of construction, a retaining wall on the job site failed, causing delay and damage. Litigation involving Blanton, BCC, various subcontractors, and Travelers ensued. Both BCC and Blanton submitted claims to Travelers, which paid $1.3 million to an escrow account that was divided between the recipients. In arbitration, BCC recovered an award in excess of $7.2 million from Blanton. Blanton subsequently filed for bankruptcy. Blanton also sued Travelers for the costs associated with removing and replacing the failed retaining wall and prevailed, recovering over $330,000. <\/p>\n\n\n\n

Fast forward to June 2016 and BCC notified Travelers of another<\/strong> insurance claim under the policy pursuant to its status as an \u201cAdditional Named Insured\u201d for alleged loss of rental income and other soft costs associated with the construction delays caused by the failed retaining wall. Though Travelers advanced $200,000 to BCC under a reservation of rights, it continued to investigate the claim throughout 2017 and 2018. Ultimately, in March 2019, Travelers denied coverage for BCC\u2019s claim and sought to recover the advanced payment. In June 2022, BCC demanded $1.4 million in unpaid loss of rental income and soft costs. Travelers refused to pay and again reiterated its right to recover the $200,000 advance payment. <\/p>\n\n\n\n

Once again, litigation ensued. In August 2022, BCC sued Travelers for breach of contract and vexatious refusal to pay under Missouri law. The district court granted Travelers\u2019 motion for summary judgment on both claims. The appeal followed. <\/p>\n\n\n\n

In a short opinion, the Eight Circuit affirmed the district court\u2019s grant of summary judgment to Travelers. The key was BCC\u2019s status as an \u201cAdditional Named Insured\u201d and not a \u201cNamed Insured.\u201d While Blanton was a \u201cNamed Insured,\u201d BCC was an \u201cAdditional Named Insured\u201d under the policy. The Eight Circuit found that the terms \u201cAdditional Named Insured\u201d and \u201cNamed Insured\u201d were defined differently and distinctly under the policy at issue. The parties did not dispute that BCC was an \u201cAdditional Named Insured\u201d under the policy. However, an \u201cAdditional Named Insured\u201d was afforded a narrower scope of coverage under the policy. The district court found that, under the plain and unambiguous terms of the policy, only a \u201cNamed Insured\u201d was covered for losses of rental income and soft costs resulting from certain construction delays. <\/p>\n\n\n\n

Among other arguments, BCC argued that this reading of the policy did not make logical sense because only BCC, the developer, and not Blanton, the contractor, would incur lost rental income. The argument was unavailing. In affirming the lower court\u2019s decision, the Eight Circuit reiterated that the policy \u201cmust be enforced as written when its language is clear and unambiguous\u201d and it follows that \u201cthe Policy does not cover BCC for rental income lost and soft costs incurred following the construction delays at the Vue Project.\u201d <\/p>\n\n\n\n

The decision serves as a reminder to both contractors and owners to: <\/p>\n\n\n\n