Feurzeig

Charles I. Feurzeig (Feurzeig) was named as a cross-defendant in a third party lawsuit, and demanded that respondent Insurance Company of the West (ICW) defend and indemnify him under an insurance policy issued to PVCC, Inc. (PVCC). ICW refused and, after Feurzeig settled the third party lawsuit, Feurzeig and PVCC (together appellants) filed this action against ICW. The trial court concluded ICW owed no duty to defend or indemnify Feurzeig because it found the cross-complaint against Feurzeig did not allege a claim covered or potentially covered by ICW’s policy. The trial court also granted summary adjudication in favor of ICW on appellants’ claim for punitive damages. Appellants timely filed this appeal.

I

Facts

A. The Policy

PVCC was in the business of acquiring, developing and managing commercial and multifamily residential properties. Feurzeig was an officer and director of PVCC.

In May 1991 PVCC purchased an ICW insurance policy which provided general liability coverage. Although the policy and attached endorsements consist of nearly 160 pages, the provisions relevant to this appeal are the (1) “Named Insured” endorsement, (2) “Limitation-Designated Premises”…