OPINION OF THE COURT
This аppeal by an insurer presents an issue that has divided courts in other jurisdictions but remains open here: whether coverage for "bodily injury” includes emotional distress resulting from the insured’s negligent conduct, where no physical injury or contact is involved. We conclude that in the circumstances presented, mental injury alone is covered.
I.
Plaintiffs are the owner and managing agent of a four-story brownstone located on East 24th Street in Manhattan. Thе property was insured under two policies. The first, a comprehensive general liability policy issued by defendant General Accident Insurance Company of America, provided coverage of up to $500,000 for each occurrence. The second, an umbrella policy issued by defendant Federal Insurance Company, provided excess liability coverage of $10,000,000 over General Accident’s occurrence limit.
Genеral Accident’s policy — the one directly in issue in this case — provided coverage for bodily injury and property damage. "Bodily injury” was defined as "bodily injury, sickness or disease.”
In 1984, during renovation of the premises, a portion оf the ceiling collapsed in the apartment rented by Emilio Belliti and Victor Rizika. In a single action, they sought damages from plaintiffs for personal injury and property damage, alleging negligence, intentional infliction of еmotional distress, assault, and breach of warranty of habitability. The complaint did not allege any physical injury or contact.
Upon receiving notification of the action, General Accident undertook the defense, reserving its rights on certain questions of coverage. Federal took no action until 1988, when it acknowledged the negligence cause of action and disclaimed liability as to the remaining claims.
Concerned with assignеd counsel’s handling of the case, plaintiffs substituted their own counsel. On the day of the substitution, and over plaintiffs’ objection, General Accident settled the property damage claim under the first cause of action for $50,000. The second and third causes of action—
While the tenants’ appeal was pending, plaintiffs commenced this action against General Accident seeking indemnity for the judgment and attorneys’ fees.
While noting that the issue appeared to present a case of first impression in New York, the Appellate Division rejected General Accident’s assertion that coverage would not attach without рhysical injury or contact, and held that "bodily injury” includes "the emotional and psychological effects of incidents that are otherwise covered by the policy.” (
II.
General Accident first urges that the issue of coverage for pure emotional distress is controlled by prior decisions of this Court, pointing to Brustein v New Amsterdam Cas. Co. (
Brustein and its рrogeny concern loss of services claims by spouses of injured persons (see, e.g., Floyd v Consolidated Indem. & Ins. Co.,
Mere statement of those cases exposes the distinction. Loss of services claims are derivative; there are no allegations that plaintiff suffered any direct injury — physical or mental. The insurer’s obligation to compensate for bodily injury does not extend to derivative claims for loss of servicеs which occurred as a result of physical injuries suffered by a third person (see, County of Chemung v Hartford Cas. Ins. Co.,
Nor is Rosman controlling. In Rosman this Court considered whether the phrase "death or wounding * * * or any other bodily injury” contained in the Warsaw Convention created liability for psychic trauma not resulting from impact (
The present case is different in several important respects. First, we are interpreting not an international treaty aimed at limiting liability, but a private contract of insurance. Second, the clause at issue in Rosman did not include the terms "sickness” and "disease,” but spoke of "wounding” and bodily injury, plainly contemplating something physical.
Pertinent also is the fаct that the Warsaw Convention was drafted more than 60 years ago, when liability for emotional distress was more circumscribed (see, Eastern Airlines v Floyd, 499 US —, —,
We therefore agree with the Appellate Division that the question remains an open one in this State.
III.
The principles governing interрretation of insurance contracts are well settled. Unambiguous provisions of a policy are given their plain and ordinary meaning. But where there is ambiguity as to the existence of coverage, doubt must be resolved in favor of the insured and against the insurer (see, United States Fid. & Guar. Co. v Annunziata,
The legal question whether the term "bodily injury” is ambiguous has been extensively litigated in other jurisdictions and has engendered lively debate throughout the country. Some courts have found the term ambiguоus (see, e.g., Lees v Smith, 363 So 2d 974, 980 [La App]; NFS Corp. v Insurance Co., 213 NJ Super 547,
We conclude that the key term "bodily injury,” as used in the policy before us, is ambiguous.
On its face, the policy purchased by plaintiff property owners is one of comprehensive general liability insurance. It specified as "coverages” "bodily injury liability and property damage liability,” suggesting one covered category of injury to the person and a second covered category of injury to property. There is at least an ambiguity in this respect. The ambiguity is heightened, not eliminated, by the policy’s explicit definition of "bodily injury” as "bodily injury, sickness or disease.” The categories "sickness” and "disease” in the insurer’s definition not only enlarge the term "bodily injury” but also, to thе average reader, may include mental as well as physical sickness and disease.
We decline General Accident’s invitation to rewrite the contract to add "bodily sickness” and "bodily disease,” and a requirement of prior physical contact for compensable mental injury. General Accident could itself have specified such limitations in drafting its policy, but it did not do so.
We note that the definition proposed by plaintiffs — one that includes coverage for purely emotional distress — is consistent with recent case law in this State allowing recovery for such injuries in a variety of contexts (see, e.g, Matter of Wood v Laidlaw Tr.,
This development of the law is relevant to the present controversy. Recognition of the compensability of purely mental injuries for claimants brings with it inсreased exposure to liability for insureds. This underscores that the reasonable expectation of property owners purchasing a comprehensive policy such as plaintiffs’ would be that their liability for purely mental injury would fall within their insurance cover
Thus, we conclude that "bodily injury” in General Accident’s policy is ambiguous and that, resolving the doubt in favor of insured and against the insurer, General Accident is obligated to indemnify plaintiffs.
IV.
Finally, we reject General Accident’s argument that the award of attorneys’ fees was improper. This argument is based on factual assertions considered and rejected by Supreme Court. In affirming, the Appellate Division held that thе award represented reasonable attorneys’ fees and costs incurred by plaintiffs in defending the tenants’ action. There is no basis in the record for overturning this determination (see, Matter of Freeman,
Accordingly, the order of the Appellatе Division should be affirmed, with costs.
Chief Judge Wachtler and Judges Simons, Titone, Hancock, Jr., and Bellacosa concur.
Order affirmed, with costs.
Notes
. Similar relief was sought from Federal. In that plaintiffs’ net loss fell within the primary policy limits, Supreme Court granted Federаl’s motion to dismiss the complaint, and the Appellate Division affirmed. While Federal appears on the present appeal as "defendant-respondent,” the result we reach makes it unnecessary for us to consider Federal’s alternative arguments for affirmance.
. The Appellate Division affirmed Supreme Court’s ruling that the verdict in the tenants’ action was based on negligent, rather than intentional, conduct and General Accident does not press that issue here.