“Arising out of” is a phrase commonly found in an insurance policy. It’s a broad phrase, and courts construe it that way. When this phrase appears in an exclusion, courts often apply a “but for” causation test. And that may mean the exclusion applies even though the insured itself did not commit the excluded act. The first three cases in this month’s update address this point.
• Texas: Assault and battery exclusion bars coverage for negligence claim at a rave shooting.
• Georgia: Firearms exclusion bars coverage for negligent security claims after gunfire erupts inside a bar.
• Louisiana: Bodily injury exclusion bars coverage for injury caused by a falling tree.
As these cases illustrate, it was not the theory of liability, but the genesis of the claim, that determined whether the suit arose out of the excluded act. When presented with multiple claims against an insured but not enough limits to go around, insurers sometimes interplead claims. They bring all claimants into a single lawsuit, depositing their remaining liability limits into court so the claimants can duke it out directly. But are insurers under a duty to interplead? That’s the question a Montana federal court had to decide.
An officer of a small business corporation intentionally burned down the corporation’s bar. Can the corporate entity claim to be an innocent co-insured? The Eighth Circuit decides.
A shooting range owner cleared wetland and vegetation buffers without a permit. Is there an “occurrence”? The Ninth Circuit weighs in.
We hope you find this update informative.
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