THE "EXPECTED OR INTENDED INJURY" EXCLUSION IN LIABILITY COVERAGE FORMS

(April 2019)

INTRODUCTION

Commercial and personal lines liability coverage forms and policies exclude bodily injury or property damage expected or intended from the standpoint of the insured. Stated another way, there is no coverage for intentional torts.

THE EXPECTED OR INTENDED INJURY EXCLUSION

Although the wording of this exclusion may appear very clear, it is a bit murky because this is the only exclusion that provides a point of view through which to view the loss. Only bodily injury or property damage that is intended from the insured’s standpoint is excluded. The coverage question depends on who thinks the bodily injury or property damage was intentional.

Examples:

Herman and Jason had an argument. Later that day, Jason throws a ball that strikes Herman.

Scenario 1: Jason was playing with his sons Eric and Paul. He throws the ball to Eric, who misses it. The ball flies into Herman’s yard and strikes Herman on the head.

Scenario 2: Jason was angry at Herman and was throwing the ball against the back fence to cool off and the ball went too high striking Herman on the head.

Scenario 3: Jason saw Herman in the back yard and threw the ball directly at him.

The point of view is very important in this example. From Herman’s standpoint, he is injured and believes that in all scenarios the action was intentional. However, from Jason’s standpoint, only in scenario 3 was his action intentional. Because the exclusion applies based on the insured’s standpoint, only in scenario 3 will the expected or intended injury exclusion apply.

Another aspect of this exclusion is that the bodily injury and the property damage must be intended. This raises another important question. If the action of the insured was intentional but the resulting property damage and bodily injury were not intentional, does the exclusion apply? This is particularly important when insureds are engaged in pranks or “just having fun.” Situations in which no one was to be harmed and no damage was to occur, but unexpected events intervened that caused the prank to backfire should be carefully reviewed.

Example: Patricia and Uma decide to play a fun trick on Melody. They understand she is afraid of squirrels so load up her desk with peanuts and place a squirrel on her desk holding a little sign that says, “Thanks for letting me borrow your desk.” Melody opens her desk and reaches inside touching the peanuts. She becomes hysterical because she is highly allergic to peanuts. She panics and starts searching for her Epi-pin and trips over her chair, breaking her leg.

The action of Patricia and Uma was very intentional but the bodily injury to Melody was not.

From the insurance standpoint, this language and the legal decisions of courts that have jurisdiction and interpret the language are the factors that determine whether or not coverage applies. Some states interpret the exclusion and its language broadly and liberally. Others interpret it literally. Jurisdictions that take the more liberal approach take the degree of injury or damage inflicted into consideration and whether the results of the act were expected or intended, not simply whether the act itself was expected or intended.

Another concern is the impact of the exclusion on innocent insureds.

Example: In the above scenario both Patricia and Uma played the prank. However, it is later discovered that Patricia was very aware of Melody’s allergy and that she fully intended for Melody to be injured. Uma was unaware and totally innocent.

Under the exclusion, if bodily injury and property damage that is intended by the insured occurs, there is no coverage. The use of “the” rather than “an” when referring to insured could suggest that another insured who was party to the event but had no such intention would continue to have coverage.

Some states have also enacted laws that provide exceptions to the exclusion. Some of these laws permit protection or coverage for the innocent insured that had no part in or knowledge of the expected or intended act. Others protect the innocent insured victim of domestic abuse if the expected or intended injury or damage resulted from an act of domestic abuse.

THE EXCEPTION

If the insured intends the bodily injury or property damage, there can still be coverage. The exception applies to only intentional bodily injury though and applies only when reasonable force is used to protect property or people.

Example: Perry walks into his store and sees a stranger accosting Sandy, a customer. Perry throws the sack he is carrying directly at the stranger who falls to the ground. Sandy screams.

Scenario 1: The stranger is Sandy’s husband who had just stumbled and was reaching out to her for support.

Scenario 2: The stranger was attempting to grab Sandy’s purse just as Perry walked in.

Perry’s action would be covered as an exception because under both scenarios, from his standpoint, he was protecting Sandy and the force was reasonable.

CONCLUSION

This exclusion is always a hot topic and insurance professionals should study and be familiar with recent court decisions in the states or jurisdictions where they are involved.