CHAPTER SEVEN- SECTION II - LIABILITY COVERAGES
ISO. COVERAGE E-Personal Liability
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, we will:
1. pay up to our limit of liability for the damages for which the insured is legally liable. Damages include prejudgment interest awarded against the insured.
Other Company. COVERAGE L-Personal Liability
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, we will:
1. pay up to our limit of liability for the damages for which the insured is legally liable;
This section of the Homeowners Policy, Section II, pertains to liability insurance. Liability insurance is coverage for all sums that the insured becomes legally obligated to pay because of bodily injury or property damage, and sometimes other wrongs to which an insurance policy applies.
Wrongful Death: The insurer has no obligation to defend the insured or to pay any judgment that might be rendered against him in a wrongful death action arising from a shooting where the surrounding circumstances showed a subjective intent to harm the victim and overcame the insured's testimony that he did not mean to cause the injury when he shot his gun at the victim.
Criminal Act: The laws of most, if not all, states, will hold that nothing requires an insurer to indemnify a third party for an insured's criminal acts, nor does an insurer's exclusion of coverage for criminal acts violate public policy. Thus coverage was excluded where the claim arose out of sexual abuse for which the insured had been convicted.
Libel Action: The insurer had a duty to defend and/or indemnify the insured in regard to a pending libel action against him because, applying a subjective standard to determine whether the insured expected or intended to inflict the damage claimed by the plaintiff in the libel action, the uncontroverted evidence was that he did not.
Negligence: Where the insured was sued for negligence and negligent misrepresentation in connection with the sale of property, the insurer had no duty to defend or indemnify because the lawsuit did not seek damages for "bodily injury" or "property damage" caused by accident and thus was not an "occurrence" as defined by the policy. Where the insured was sued for negligence and negligent misrepresentation during the sale of the property, the insurer had no duty to defend or indemnify the insured because the lawsuit did not seek "property damages" as defined by the policy.
Suit for breach of contract, etc.: Where the insured was sued for breach of contract, breach of express warranty, breach of implied warranty, strict liability, intentional misrepresentation, fraud and failure to disclose, and intentional infliction of emotional distress in connection with sale of property, the insurer had no duty to defend or indemnify the insured because the lawsuit did not seek damages resulting from an "accident" and thus was not an occurrence as defined by the policy. Where the insured was sued for negligence and negligent infliction of emotional distress due to an alleged breach of a contract, the insurer had no duty to defend or indemnify the insured.
Libel and Slander: Where the insured was sued for slander, slander per se, libel and libel per se, the insurer had no duty to defend or indemnify the insured because the lawsuit did not seek damages resulting from "bodily injury" from an "accident."
Suit for other than Bodily Injury or Property Damage: Where the insured was sued for breach of contract, and intentional infliction of emotional distress in connection with the sale of property, the insurer had no duty to defend or indemnify because the policy excluded coverage for intentional acts. Where the insured was sued for rescission, fraudulent failure to disclose during sale of property, negligent misrepresentation, and negligent infliction of emotional distress, the insurer had no duty to defend or indemnify the insured because the lawsuit did not seek damages constituting "bodily injury" or "property damage."
Intentional affliction: Where the insured was sued for intentional infliction of emotional distress and trespass arising from the insured's interfering with neighbor's property, the insurer had no duty to defend or indemnify the insured because the policy excluded coverage for intentional acts of the insured.
Hate crimes: Where an insured was sued for injuries caused by his racially motivated hate crimes, the insurer had no duty to defend or indemnify because the policy excluded coverage for intentional acts of the insured and the acts did not constitute "accidents."
Trespass: The court held that an insurer is required to defend its insured in a lawsuit in which an adjoining owner sought damages for trespass because trespass may constitute an "accident" as defined by the policy.
An insured and her step-great-grandson who lived in separate units of a duplex owned by the insured were not members of the same household. Therefore the insured's liability policy did not provide liability coverage for the step-great-grandson. For purposes of liability coverage extended to persons who are permanent residents of insured's household, "household" may be broadly defined as a collection of persons, whether related or not, who live together as a group or unit of permanent or domestic character, with one head, under one roof or within common curtilage (the land or yard adjoining the house), who direct their attention toward common goals of their mutual interest. 86
Reasonable time to review case: An insurer does not have a duty to immediately defend any suit tendered to it by its insured. The insurer is allowed reasonable time to review its position before undertaking the insured's defense. An insured claiming his insurer was dilatory in providing defense bears the burden of showing that the insurer delayed without proper cause. Insured's Homeowners policy did not cover claims by the insured's former girlfriend that the insured had entered into an express oral or implied quasi-marital agreement to share equally in property acquired by the community during the relationship. The claims made by the former girlfriend relate to breach of contract and do not constitute "accidental loss."
Intent needed to be shown: Insurer brought suit to determine duty to indemnify where the insured was adjudged liable for sexual molestation of a child. The court held that if the insured had merely negligently touched the child, there could still be coverage. The mere allegation of sexual molestation does not preclude coverage, as a matter of law. It is only when there is an intent to molest that an intent to harm may be implied. Because of a general verdict in the underlying suit, intent was not established and the insurer's motion for summary judgment failed.
Spreading disease an “intentional act:” Insured mistakenly believed he did not have herpes and represented this fact to his lover. In fact, the insured did have herpes, and his lover sued him for fraud when she contracted herpes. The insurer defended under a reservation of rights and brought suit for declaratory relief. The appellate court reversed the trial court's order granting summary judgment in favor of the insurer. The court held that the insurer had a duty to defend because coverage extended for bodily injury, including disease. The court also held that if the insured did not have actual knowledge of his malfeasance, though he should reasonably have known, the indemnity agreement is not voided. The court could infer under state insurance codes, an intent to harm based on the intent to perform the act. The exclusion for intentional acts is inapplicable where an "unexpected, independent and unforeseen happening ... produced the injury." The insurer's subsequent modification of the policy to exclude sexually transmitted diseases was deemed inadmissible as irrelevant.
Damage to reputation: The insured could not obtain a defense and indemnity on the theory that damage to reputation as a result of alleged defamation was property damage because a person's reputation is, at most, intangible property.
Injury by a psychotic person: An injury inflicted by an insured who is psychotic is not an "accident" and is an intentional act within the meaning of the policy provisions if the insured intended to cause the injury, even if the insured's conduct was the result of the insured's mental condition.
Location of injuries determines coverage: The insurer was not obligated to provide a defense or pay a judgment for injuries resulting from the entrustment of the insureds' motorized off-road recreation vehicle by the insureds' daughter where the entrustment occurred on premises but the injury occurred one block away from the insured location.
Sexual assault and battery: There was no duty to defend an insured for his alleged sexual assault and battery of a girl at a school at which the insured was employed as a teacher because the insured's conduct, characterized in the complaint as willful and negligent, did not come within the policy's definition of covered "accident" ("a sudden, unforeseen, unintended event").
Damage to a coral reef: The insurer was obligated to pay restitution ordered as part of the insured's plea agreement in a criminal prosecution for damage to a coral reef struck by the insured's boat.
Riding an ATV in a nearby lot: The motorized land conveyance exclusion did not preclude coverage for injuries sustained while riding the insureds' all-terrain vehicle (ATV), which was kept in the insureds' garage but was taken by their son to a nearby lot where the accident occurred.
Accident while riding a lawn mower: The named insured was sued for contribution for injuries arising out of an accident on a riding lawn mower. The parties agreed that the plaintiff in the underlying suit was also an insured under the policy. The insurer brought a declaratory relief action to determine its duty to indemnify and defend the named insured in the underlying suit. The insurer contended that the family household exclusion applied. Defendants in the declaratory relief action argued that exceptions to the vehicle exclusion created coverage. The court held that the coverage for certain vehicles granted in the exceptions did not render ambiguous the family household exclusion clause.
CONSUMER APPLICATION
The insured's wife ran a babysitting service at the family home. Her husband attempted CPR on one of the children. The child's parents sued for injuries allegedly due to negligent administration of CPR and negligent care of the child. The insureds filed suit against their insurer when coverage was denied based on the intentional acts, business pursuits, and home day-care exclusions in the policy. On appeal from summary judgment, the court ruled that the child's injuries arose from the business pursuits of the insured wife. Even though the insured husband was not in the business, the exclusion also applied to him because the exclusion extended to injuries arising from the business pursuits of any insured. 87
Drunk son: Policy of Homeowners insurance did not afford coverage for son of the insured who assaulted and injured police officers in an hour-long struggle. The son forcibly resisted arrest and son's voluntary intoxication did not vitiate his intent, therefore his actions could be considered accidental and thus within policy definition of an "occurrence."
Sexual assault by child: Sexual assaults by the insured's minor son against minor daughter of third party constituted an "occurrence" under policy, because boy neither expected nor intended the bodily injury to the girl, even though his acts were intentional, and insurer was required to afford a defense to its insureds. The court adopted a mixed objective/ subjective reasonable child standard and granted summary judgment in favor of insureds, finding that an average 7- to 9-year-old child could not reasonably foresee that sexual acts could cause harm to another child. Because boy could not reasonably foresee harm, the intentional acts exclusion did not apply.
Psychiatric injury: Absent physical manifestation of injury supported by sufficient documented evidence, phrase "bodily injury" in Homeowners policy did not include claim for psychiatric injury.
Voluntary manslaughter by children: Convictions of children of the insured for voluntary manslaughter in connection with shooting death of passenger in another automobile came within exclusion for intentional acts in parents' Homeowners policy.
Toga party: Term "residents of your household" was unambiguous, and self-supporting adult son, who visited vacation cabin of the insured mother on some weekends and for one week per year but otherwise maintained his own residence and lived apart from her, was not an insured under his mother's Homeowners policy and thus was not entitled to defense or indemnification in connection with liability action arising out of toga party.
Transmitting sexual disease: Insured's transmission of genital herpes resulting from consensual intercourse between adults was an intentional act as a matter of law when the insured knew or should have known that he had herpes but failed to disclose his condition to his sexual partner prior to engaging in intercourse, and application of intentional acts exclusion as well as public policy barred coverage for claim of injured partner.
Prank?: Neither intentional acts exclusion nor criminal acts exclusion applied to situation in which teenager was electrocuted to death by friends who intended to shock him but did not intend to cause him harm during prank.
Shot in the foot: The record reflected the insured was familiar with guns and had experience in shooting them and, further, that he had not intended to shoot or hit the victim with the shotgun, but only to stop him by firing in front of him as he approached. Therefore the court affirmed the jury's finding that coverage was not precluded since the insured did not intentionally shoot the victim in the foot.
Transmission of STD to child: Adult insured who was not charged under criminal code for consensual sexual contact with minor was entitled to coverage under Homeowners policy, despite intentional acts exclusion, because there was no evidence he was aware of the risk or intended to transmit herpes simplex virus, which caused bodily injury to minor.
Defamation and inflicting emotional distress not covered: Insured who had been sued for defamation and the intentional infliction of emotional distress sought coverage under his homeowners policy. The court found that no coverage existed under the bodily injury section of the policy since the tort plaintiff did not claim that he suffered physical injuries and that no coverage existed under the property damage section of the policy because there were no claims that the tort plaintiff's tangible property had been damaged or destroyed by the insured's allegedly defamatory statements.
An insured who worked as a photography technician was sued by the subject of provocative photographs that the insured distributed without the subject's permission. The homeowner's insurer refused coverage, claiming that there was neither an "occurrence" nor a "bodily injury" required to trigger coverage. The court found that an "occurrence" "takes place where the resulting injury or damage was unexpected or unintended, regardless of whether the policyholder's acts were intentional." The court further held that an allegation of mental anguish or emotional distress was sufficient to support evidence in damages for the accompanying physical manifestations. Therefore, this claim was covered under the terms of the policy. 138
PROVIDING DEFENSE
ISO. COVERAGE E-Personal Liability
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, we will: ...
2. provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent. We may investigate and settle any claim or suit that we decide is appropriate.
Other Company. COVERAGE L-Personal Liability
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, we will: ...
2. provide a defense at our expense by counsel of our choice. We may make any investigation and settle any claim or suit that we decide is appropriate.
Determining the duty to defend: The scope of an insurer's duty to defend, as distinguished from its obligation to indemnify its insured for any resulting judgment, is to be determined solely by the allegations of the complaint and not by reference to the full range of damages potentially available.
Baby-sitting service considered as business: The insured's wife ran a babysitting service at the family home. Her husband attempted CPR on one of the children. The child's parents sued for injuries allegedly due to negligent administration of CPR and negligent care of the child. The insureds filed suit against their insurer when coverage was denied based on the intentional acts, business pursuits, and home day-care exclusions in the policy. On appeal from summary judgment, the court ruled that the child's injuries arose from the business pursuits of the insured wife. Even though the insured husband was not in the business, the exclusion also applied to him because the exclusion extended to injuries arising from the business pursuits of “ANY” insured.
Minor guest passenger in pickup truck involved in accident was injured. Driver's mother's policy's exclusion for liability coverage clearly and unambiguously excluded bodily injury caused by an insured arising out of the use of a motor vehicle owned or operated by any insured. The driver of the vehicle in which the plaintiff's minor daughter was a passenger was an insured under the Homeowners policy; as such, his liability was excluded and there was no duty to defend. The exclusion was "clear and unambiguous." 88
Defamation: Teacher sued the insured for damages arising out of comments made by the insured concerning the teacher's competency and fitness. The insurer argued that the complaint set forth a claim only for defamation, which was not covered by the policy; the insured argued that the complaint also stated a claim for negligent and intentional infliction of emotional distress and outrage. The court held that the fact that the claims were poorly made and almost sure to fail was irrelevant to the company's initial duty to defend. The duty to defend is not abrogated by the fact that the cause of action cannot be maintained against the insured either in law or in fact because the cause is groundless, false, or fraudulent. The insurer was required to defend even though the complaint did not clearly articulate the facts necessary to prove any specific cause of action.
Apportioning expenses: Where expenses incurred by the insured cannot fairly be apportioned between covered and noncovered claims, the insurer alone must bear the reasonable costs of the defense.
Punitive damages excluded: Insurance policy must explicitly state that it does not provide coverage for punitive damages in order for those damages to be excluded.
Sexual assault upon a daughter: Acts of mother who facilitated sexual assaults upon her minor daughter were not accidental in order to constitute an "occurrence" and were result of intentional conduct to cause harm, not negligence; thus mother's acts were not covered or were excluded under policy of Homeowners insurance.
Insurer defending negligence claim: Although intentional or criminal acts exclusions applied to allegations of assault and battery and conspiracy to commit assault and battery arising out of injuries inflicted on a police officer while he was attempting to break up fight involving insured, the insurer was required to defend because of the presence of a claim of negligence arising out of the incident.
Legally obligated to pay to include punitive damages: Term "legally obligated to pay" was sufficiently broad to cover punitive damage award absent limiting language set forth in the insurance policy.
Transmission of Sexually transmitted disease (STD): Adult insured who was not charged under criminal code for consensual sexual contact with minor was entitled to coverage under Homeowners policy, despite intentional acts exclusion, because there was no evidence he was aware of the risk or intended to transmit herpes simplex virus that caused bodily injury to minor.
CONSUMER APPLICATION
The insurer may have a duty to defend even when it ultimately has no obligation to indemnify, either because no damages are awarded in the underlying action against the insured or because the actual judgment is for damages not covered under the policy. Allegations of suit alleging "loss of use" of real property arising from the construction of an encroaching deck triggered potential coverage for property damage under homeowners policy by alleging continuing "loss of use" of tangible property and consequent damage during a period of the policy. Coverage existed for encroachment that was created before the policy period, but that caused continuing property damage during the policy period under continuous injury trigger of coverage. 139
END OF SETTLEMENT OR DEFENSE PERIOD
ISO. COVERAGE E-Personal Liability
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, we will: ...
2. ...Our duty to settle or defend ends when the amount we pay for damages resulting from the occurrence equals our limit of liability.
Other Company. COVERAGE L-Personal Liability
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, we will: ...
2. ...Our obligation to defend any claim or suit ends when the amount we pay for damages, to effect settlement or satisfy a judgment resulting from the occurrence, equals our limit of liability.
Complaint need not negate all exclusions: Where complaint fairly states facts that appear to bring injury within coverage, the insurer must defend the insured; complaint need not negate every exclusion within policy.
Psychiatric injury: Absent physical manifestation of injury supported by sufficient documented evidence, phrase "bodily injury" in Homeowners policy did not include claim for psychiatric injury.
Insured causes bodily injury intentionally: Where an insurer has irrefutable proof that conduct of its insured in causing bodily injury to another was intentional and therefore excluded from coverage, the insurer has no duty to defend or indemnify its insured against lawsuit that alleges the conduct causing injury was negligent.
Insured not guilty because of mental illness: Intentional acts exclusion in policy of Homeowners insurance did not apply to situation in which the insured, who shot and killed another, was found not guilty of murder by reason of mental illness because he did not know nature or wrongfulness of act or was deprived of ability to control his conduct, and the insurer had a duty to defend and indemnify him in wrongful death action.
Policy provision requiring the insurer to defend the insured against any suit seeking damages for bodily injury and to investigate, negotiate, and settle any claim or suit based upon judgment of the insurer - bound the insurer to settle prelitigation claims in its discretion. However, it did not contractually bind the insurer to assume defense of claims made against the insured for negligent transmission of genital herpes prior to litigation. After timely notification and cooperation with the insurer, the insured's settlement of pending claims was in his best interest when he faced possible punitive damages, claims for emotional distress, and public exposure if suit was filed by injured sexual partners, and the insurer had reserved its right to deny coverage pursuant to intentional acts exclusion or public policy. 89
Convicted of disorderly conduct: Criminal conviction for disorderly conduct after plea of no contest was admissible evidence to support denial of coverage by the insurer based upon exclusion in Homeowners policy for intentional or criminal acts of the insured, and the insurer had no duty to cover or defend under the terms of the policy.
Mental anguish and loss of reputation: Where claim for mental anguish and loss of reputation, but not for bodily injury, was asserted against the insured in defamation action, no duty to defend was triggered under Homeowners policy.
Lost investments and deposits: Insurer owes no duty to defend or indemnify the insured for claim made for lost investments and deposits as such are not tangible property recoverable under property damage liability coverage.
In considering the insurer's duty to defend, the court examined the language in the policy, which stated that "personal liability" coverage and "medical payment to others" coverage do not apply to bodily injury or property damage, "which is expected or intended by the insured." In this case, plaintiff, a guest of the insured, suffered a broken ankle in a fistfight with the insured. The court held that the insurer owed a duty to defend because the insured, while intending to be involved in a fistfight, may not have intended to break the ankle of his guest. In summary, the court held that ambiguous language that has any possibility of causing liability under the policy requires the insurer to defend the insured. 90
Homeowners insurance as primary: In declaratory judgment action brought by Homeowners insurer against the insurer of association to which the insured belonged for defense costs and monies paid to settle underlying action against the insured arising from a shooting, the court held that the Homeowners policy provided the primary coverage and thus the Homeowners insurer was liable for defense costs and the amounts paid in settlement within its policy limits.
Duty to defend the insured:
- When the insurer owes coverage, ipso facto (by the very nature of the situation) it has a duty to defend the insured.
- An the insurer's duty to defend is broader than its obligations to pay.
- In a few states, an insurer may be required to provide a defense even where the ultimate resolution of the case demonstrates that the insurer is not liable for indemnification.
- In certain states, if there is any ambiguity regarding an insured's policy's potential coverage applicability to a claim, then the insurer must provide the insured with a defense.
- If both covered and excluded acts are alleged against an insured, then the insurer's duty to defend attaches.
MEDICAL PAYMENTS
ISO.
COVERAGE F-Medical Payments to Others ... As to others, this coverage applies only:
1. to a person on the insured location with the permission of an insured; or
2. to a person off the insured location, if the bodily injury:
a. arises out of a condition on the insured location or the ways immediately adjoining;
b. is caused by the activities of the insured;
c. is caused by a residence employee in the course of the residence employee's employment by an insured; or
d. is caused by animal owned by or in the care of an insured.
Other Company.
COVERAGE M-Medical Payments to Others ... This coverage applies only:
1. to a person on the insured location with the permission of an insured;
2. to a person off the insured location, if the bodily injury:
a. arises out of a condition on the insured location or the ways immediately adjoining;
b. is caused by the activities of an insured;
c. is caused by a residence employee in the course of the residence employee's employment by an insured; or
d. is caused by an animal owned by or in the care of an insured;
The insureds owned a piece of property, other than their residence, where two children were involved in a motorcycle accident. In a declaratory relief action to determine its duty to defend and indemnify under a Homeowners and rental dwelling policy, the court held for the insurer, noting that it was clear that the losses did not occur on an insured location or the residence premises. The coverage for 500 acres of farm land did not apply because the accident occurred on land that had six buildings. The fact that the accident did not arise from conditions in or around the buildings was immaterial. The insured's argument that the coverage had been created by the insurer's waiver of policy provisions was specifically rejected. 91
Accident to third party at location other than the insured’s primary residence: Homeowners policy covered accident to third party, even though accident to third party occurred at a different home owned by the insured than the one listed in the policy and despite fact the insured did not move into home where accident occurred until after accident, where the insured stated in an affidavit that he had decided to use home as residence and had removed a rental listing of the home over one month before the accident occurred.
STUDY QUESTIONS
1. Where an insured shot a gun at a rival gang, wounding a youth, and it was apparent that the insured really intended to hurt the victim; what is the insurer’s obligations?
A. The insurer would defend the insured or pay any judgement rendered against him.
B. The insurer is under no obligation whatsoever to defend the insured or pay any judgement.
C. The insurer must provide a defense, including attorney’s costs and court expenses, but not pay any judgement against the insured.
D. The insurer must pay any judgement awarded the victim, but does not have to pay for defense costs.
2. Where an insured is sued for libel and slander, what are the duties of the insurer?
A. The insurer must defend the insured and pay any judgement rendered against him.
B. The insurer must pay any judgement rendered against the insured, but not defend him.
C. Since the lawsuit did not seek damages resulting from bodily injury from an accident, the insurer has no duties to defend or pay any judgement.
D. The insurer must hire and pay the expenses of, an attorney versed in civil suits chosen by the insured. If there is a judgement, the insurer pays 50% and by law, the insured has to pay the other 50%.
3. In providing a defense under a Homeowners policy, which of the following is true?
A. The attorney may be chosen by the insured.
B. The insurer may not appoint a counsel if the suit is thought to be groundless.
C. The insurer may investigate and settle any claim or suit that they (the insurer) feels is appropriate.
D. No investigation or claims settlement can be made without the insured’s permission.
4. In most cases of sexual molestation involving children, insurers are usually
A. required to furnish legal defense and pay for any judgements rendered.
B. decline coverage as sexual molestation is outside of the policy coverage, as “intent” is shown or implied in conduct of this type.
C. required to furnish defense and pay judgements if the molester is a family member.
D. required to furnish defense and pay judgements as the courts consider the molesters to be insane and therefore not capable of having intent to hurt or injure the children.
5. Where an insured is being sued for multiple actions, some covered by the policy, and some excluded, how are the costs of defense determined.
A. The insurer and the insured would each pay 50% of the total defense costs.
B. The insured must pay all of the defense costs.
C. The court would appoint a pro bono attorney for the defense, so there would be no costs.
D. The insurer alone must bear the reasonable costs of the defense.
6. When does the obligation of the insurance company in defending a covered suit, end?
A. When the insured discharges the attorneys.
B. When the lower court ruling has been given, as the insurer is not involved in any appeals.
C. When the amount paid for damages, effect settlement or satisfy a judgement, equals the limit of liability of the policy.
D. As long as the insured wants legal counsel for matters involving the covered loss.
7. The duties of the insurer to settle liability claims, does NOT include
A. investigation.
B. negotiation.
C. inherent incompetence.
D. settle any claim or suit seeking damages.
8. Under Section II, Coverage M,. Medical Payments to Others, would medical payments be provided to a person who was injured by a bull owned by the insured, but which had gotten out of the corral and was in a neighbors field? Why?
A. No – the incident did not happen on the insured’s premises.
B. Yes – the animal was owned by the insured and was therefore covered off property.
C. No – damages by a dumb animal is not covered.
D. No – the animal would have had to be inside a controlled pen for the policy to apply.
9. Which of the following statements is NOT true?
A. When an insurer owes coverage, ipso facto it has a duty to defend the insured.
B. If both covered and excluded acts are alleged against an insured, then the insurer does not need to defend either.
C. An insurer’s duty to defend is broader than its obligation to pay.
D. In many states, if there is ambiguity regarding coverage, the insurer must provide the insured with a defense.
10. When the insured tried to get some of the people out of his house, a policeman tried to break it up. The insured took offense at the policeman being on his property and attacked the officer, as did some of his friends. The insured was charged assault and battery on a police officer, conspiracy to commit assault and battery, and negligence for not controlling the situation on his property. What duties does the Homeowners insurer have?
A. The insurer does not have to become involved as the assault and battery were intentional.
B. The insurer was required to defend because negligence is not excluded under the policy.
C. Assault and Battery are serious crimes, which overrides any other actions of the insured, so the insurance company will not become involved at all.
D. The insurer will not become involved as it involved a police officer. Homeowner policies are not allowed by law to defend an insured against authorities.
ANSWERS TO STUDY QUESTIONS
1B 2C 3C 4B 5D 6C 7C 8B 9B 10B