Limited Partnerships Under a CGL Form

Q

One of our clients has questioned us on who is an insured under the CGL form with reference to limited partnerships. We believe that general partners of a named insured limited partnership fall within the definition of an insured, but what about the limited partners? Most limited partnership agreements place all the responsibility and liability on the shoulders of the general partner, but if the limited partner was named in a lawsuit against the named insured company, would the insurer owe the same defense and coverage to the limited partner as the general partner?

California Subscriber

A

Limited partners are covered as insureds under the terms of the CGL form. When the who is an insured clause discusses a partnership, it states that partners of the named insured are insureds with respect to the conduct of the business. This language is not limited to general partners, but includes all partners of the named insured.

If limited partners were not to be included in the generic term “partners,” then the insurer should have stated that in the policy provisions. Since the term “partners” is not defined on the CGL form and is not specific as to general or limited, the insured is entitled to the benefit of any doubt. We believe that limited partners are insureds under the CGL form and are entitled to the same defense and coverage as the general partner.

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