Part 5- Property, Chapter 27: Insurance Law, Doc 5

This section delves into various types of liability insurance, highlighting how liability insurance policies protect individuals, homeowners, and businesses from financial obligations arising from liability to others. Key Points: 1. Combined Property and Liability Insurance: o Some policies, like automobile and homeowners’ insurance, combine property coverage (protecting physical assets) with liability coverage (protecting against legal obligations to others). For example, auto insurance covers property damage to the car as well as liabilities from accidents causing injury to others. 2. Types of Liability Insurance Policies: o Personal Liability Policies: Cover an individual’s potential liability for accidents resulting in bodily injury or property damage to others. Intentional wrongful acts or criminal behavior are typically excluded. o Homeowners' Policies: Often include liability coverage for accidents occurring on the property, covering both bodily injury and property damage caused by negligence. o Business Liability Policies: Cover liabilities arising from business activities, with specific exclusions such as intentional wrongful acts and pollution (unless accidental). Business policies often extend to cover employer liability for employees' actions under doctrines like respondeat superior, which holds employers accountable for certain employee actions performed in the course of employment. 3. Ambiguity in Policy Terms and Coverage of Intentional Acts: o Auto-Owners Insurance Co. v. Harvey: This case highlights how ambiguous policy language can affect coverage. Here, the court determined that Gearheart’s act of pushing Brandy might be classified as an “occurrence” under the policy’s ambiguous terms, as the push was intentional but the resulting death was unintentional. The court ruled that ambiguity in liability policies should generally favor the insured, leading to potential coverage even for actions that are partially intentional if the specific harm was not intended. 4. Professional Liability Policies: o Designed for professionals like doctors, lawyers, and accountants, these policies cover liabilities specific to the professional’s field. They typically address unintentional errors or negligence in practice, such as medical malpractice (often involving physical injury) or legal errors (usually resulting in economic harm). Intentional misconduct is not covered. 5. Additional Business Policy Features: o Business liability policies may also include coverage for defamation, privacy invasion, or certain economic harms related to advertising or unfair competition, depending on the policy’s specific language. 6. Common Exclusions and Interpretive Issues: o Liability policies exclude coverage for intentional misconduct and criminal acts. However, ambiguous terms can sometimes lead to legal interpretation favoring coverage. Policy terms defining “accidents,” “occurrences,” or “bodily injury” are often key in courts' interpretations when disputes arise. Summary: Liability insurance helps individuals and businesses manage financial risks from legal liability, particularly for negligence. The inclusion of property and liability coverage in certain policies provides comprehensive protection. Cases like AutoOwners Insurance Co. v. Harvey underscore the importance of clear language in insurance policies, as ambiguous terms are typically interpreted in favor of the insured, which can extend coverage even in complex scenarios involving intentional acts with unintended consequences.