An appellate court ruled that an insurer has no duty to an additional insured because the additional insured is not being held liable to a third party. The case is BMW of N. Am., LLC v. Complete Auto Recon Servs., 731 S.E.2d 902 (S.C. Ct. App. 2012).

The Underlying Policy

Colony Insurance Company (Colony) issued a commercial policy to Complete Auto Recon Services (CARS) that included both garagekeepers and liability coverage. The garagekeepers portion of the policy included both collision and comprehensive coverage. The comprehensive coverage applied to “all sums the ‘insured’ legally must pay as damages for ‘loss’ to a ‘customer's auto’ … from any cause except: (1) The ‘customer's auto's’ collision with another object; or (2) The ‘customer's auto's’ overturn…,” while collision coverage specifically applied to “(1) The ‘customer's auto's’ collision with another object; or (2) The ‘customer's auto's’ overturn…”