"Occurrence" was defined in a general liability policy, carried by the owner of a music store, as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." Coverage was provided for events "....caused by an occurrence, and arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental to the business of the named insured conducted at or from the insured premises...."

Apparently overwhelmed by business problems and distraught, the insured placed a connected soldering iron on a pad that was soaked with cleaning fluid he had knocked over. He left the store and a fire ensued that destroyed the building. It damaged three adjoining properties and resulted in serious injury to a fireman, who fell from the roof of one of the neighboring stores. The insured admitted to having committed arson.

It was not disputed that, with respect to damage incurred by adjoining property owners, the fire was not an "occurrence" or "accident" covered by the insured's general liability insurance. The consequences of the insured's actions were predictable and the insurer was not obligated to defend lawsuits for property damage.

However, the firefighter and his wife sued the insured store owner for negligence and loss of consortium. Both the trial court and appeal court determined that, although the insured intended property damage, he did not intend to injure the firefighter. Accordingly, they said that the insurer owed a duty to defend the insured against the injury claim.

The matter rested with the Michigan Supreme Court, which concluded, with dissent, that "....the insurer has a duty to defend (the insured) in this personal injury suit because there are no facts to suggest that (the insured) intended to inflict bodily injury on anyone by setting his business on fire and that bodily injury occasioned by (the firefighter) was not the direct result of (the insured's) conduct."

(FRANKENMUTH MUTUAL INS. CO., Plaintiff, Appellant v. PICCARD dba TOWNE & COUNTRY MUSIC CENTER ET AL., Defendants, Appellees. Michigan Supreme Court. No. 89487. September 9, 1992. CCH 1993 Fire and Casualty Cases, Paragraph 3989.)