— California Subscriber

Answer: The expected or intended injury exclusion is a difficult one to apply since most courts differentiate between an intentional act and an intentional result. In other words, the owner here may have intended to throw the package but he did not intend the resultant injury. And if there is no intentional result, most courts are saying the exclusion does not apply. So, you should check with an attorney who is familiar with the law in your area to see how courts there treat the exclusion.

As for who the exclusion applies to, you have to consider the wording of the exclusion and the separation of insureds clause. The exclusion refers to “the insured,” so it applies only to “the” insured that expects or intends the injury; it does not apply to all insureds. And that is where the separation of insureds clause comes in. The CGL form treats each insured as a separate insured so that an exclusion applying to one insured does not automatically apply to other insureds.

Liability coverage for an 'intentional' injury

Question: Our insured has a standard CGL form. The insured was recently sued, and the allegations in the complaint stated that our insured intentionally caused injury to the plaintiff. The insurer is denying all liability including defense because the allegations use the word “intentionally.” We disagree with this stance.

We believe that general liability coverage defends and indemnifies the insured for all allegations for bodily injury and property damage brought against an insured in civil court. There was no criminal activity involved here, so is the insurer correct in denying any coverage?

— New York Subscriber

Answer: It is true that the CGL form says that the insurer has the duty to defend the insured against any lawsuit. But, the policy also says that the insurer has no duty to defend the insured against any lawsuit seeking damages to which the insurance does not apply. And, the policy goes on to say that the insurance applies to bodily injury or property damage only if caused by an occurrence. An occurrence is defined in the policy as an accident. Also, the expected or intended injury exclusion prevents coverage for bodily injury expected or intended from the standpoint of the insured. So, by alleging that the insured intentionally caused the injury, the claimant allows the insurer the right to deny coverage and defense to the insured.

Most complaints allege a negligence claim against the insured, in addition to any allegation of intentional injury, in order for the insured's liability insurance policy to respond and become engaged in the claim activity. But, if this complaint against the insured is based only on intentional injury, the insurer does have the right to deny coverage and defense under the terms of the policy.

Commercial liability and personal injury claims

Question: Our insured has been named in a complaint alleging that they “personally or through their employees encouraged and actively participated in the intentional ejecting, harassment, and threatening of the plaintiffs.” Additionally, the complaint seeks judgment against the insured to compensate for losses suffered and injuries inflicted as a result of the insured's wrongful conduct; the injuries claimed are battery, emotional distress, humiliation, and embarrassment.

The insurer is refusing to provide a defense or indemnification on the basis that the complaint against the insured does not trigger coverage and that the conduct of the insured was intentional and criminal.

We disagree because coverage B of the CGL form covers intentional acts and we think the definition of personal injury includes wrongful eviction; the insured had the plaintiffs evicted from his business by the police. What do you think?

— Connecticut Subscriber

Answer: It is true that coverage B of the CGL form applies to intentional acts or offenses as opposed to occurrences or accidents. But, coverage B applies to personal injury, which is a defined term, and unless the definition of personal injury is met as it appears in the CGL form, the form does not apply.

The definition of personal injury does include wrongful eviction but it has to be from a room, dwelling, or premises that a person occupies, and the eviction has to be by the owner or landlord of those places. Based on your description of the event, the eviction was from the insured's business premises and so, the person(s) evicted did not occupy that premises. Also, the eviction has to be a wrongful eviction and if the police did the actual evicting, the presumption is there that the eviction was not a wrongful one. So, the definition of personal injury is not met in this case and the insurer is correct in its assessment.

You did not ask about the claim for injuries based on the insured's wrongful conduct, that is, battery, emotional distress, humiliation, and embarrassment. The claim for battery would come under coverage A (bodily injury and property damage) except for the fact that this coverage applies to occurrences or accidents, and the actions of the insured do not seem to be accidental in this incident.

See also:

Ask the FC&S experts: The CGL edition

Are your clients insured for summer fun?