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 in the construction of an apartment building project. 

In BCC Partners, LLC v. Travelers Property Casualty Company of America, the Eighth Circuit affirmed the district court’s grant of summary judgment to Travelers Property Casualty Company of America (“Travelers”) in a dispute over insurance coverage. The coverage dispute arose out of BCC Partners, LLC’s (“BCC”) June 2015 contract with Ben F. Blanton Construction, Inc. (“Blanton”) 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 “Named Insured” and the developer, BCC, was an “Additional Named Insured.” 

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. 

Fast forward to June 2016 and BCC notified Travelers of another insurance claim under the policy pursuant to its status as an “Additional Named Insured” 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’s 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. 

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’ motion for summary judgment on both claims. The appeal followed. 

In a short opinion, the Eight Circuit affirmed the district court’s grant of summary judgment to Travelers. The key was BCC’s status as an “Additional Named Insured” and not a “Named Insured.” While Blanton was a “Named Insured,” BCC was an “Additional Named Insured” under the policy. The Eight Circuit found that the terms “Additional Named Insured” and “Named Insured” were defined differently and distinctly under the policy at issue. The parties did not dispute that BCC was an “Additional Named Insured” under the policy. However, an “Additional Named Insured” 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 “Named Insured” was covered for losses of rental income and soft costs resulting from certain construction delays. 

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’s decision, the Eight Circuit reiterated that the policy “must be enforced as written when its language is clear and unambiguous” and it follows that “the Policy does not cover BCC for rental income lost and soft costs incurred following the construction delays at the Vue Project.” 

The decision serves as a reminder to both contractors and owners to: 

• ensure that your expectations for insurance coverage as set forth in the construction contract align with the policy language in the actual insurance policies purchased; 
• understand what coverages are afforded to the parties under the insurance policies for your construction project, particularly when the other party to the contract is purchasing the policy; and
• be aware that coverages under the same policy may be different in scope for a “Named Insured” versus an “Additional Named Insured.”