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This Was No Accident and That Means No Insurance

Insurance companies design policies to cover their customers’ risks of accidental loss. A contractor excavating earth on a city street hits an underground telephone cable and knocks out service to a few thousand businesses and homes. A supermarket employee has partially mopped a floor when a manager summons him to help at the cash registers. A customer trips and falls over the mop left on the floor. Both of these are accidents, not injuries or damage that the businesses or their employees intended. Insurance will cover these incidents, but what about situations where the harm might not have been accidental?

The standard commercial general liability insurance policy provides coverage for “occurrences,” defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Therefore, for the policy to apply to a specific incident, the incident must be an accident. Moreover, the policy goes on to state that it does not apply to bodily injury or property damage “expected or intended from the standpoint of any insured.” The questions of whether incidents were accidents and whether an insured expected or intended resulting injuries or damages have been fodder for the courts for years.

Courts in every state have tried to develop a precise meaning for the term “accident.” The definitions vary somewhat, but they all seek to evaluate the responsible person’s intentions. For example, one state defines accident as an “unintended and unforeseen injurious occurrence.” Another state holds an incident to be accidental if the insured did not intend the resulting damage, even if he intended the specific act. Still another calls an accident, “something out of the usual course of things…not anticipated and not naturally to be expected.”  Therefore, it’s an accident when a painting contractor sprays paint all over ten parked cars because he intended to operate a spray-painting gun but did not intend for the wind to blow the paint on the cars.

Courts settle the question of whether a person intended harm to occur when they determine the facts of a case. However, they tend to rule that harm resulting from some actions can never be accidental. The high court in one state held that an act is not accidental when it is so “inherently injurious” that it is certain to result in an injury. Examples of this type of conduct are sexual molestation of children and firing a weapon at close range. Other states have held that a court can infer that someone intended to cause an injury only when a reasonable person can reach no other conclusion. Therefore, if two conclusions are possible and only one of them points to intent to cause harm, the court must assume that the person did not intend harm. The CGL policy would provide coverage for the person in this situation.

Public policy prevents insurance companies from insuring people against liability for injuries or damages they intentionally cause. Otherwise, people could commit these sorts of acts with little risk to themselves. Besides, businesses pay good money to insure themselves against accidents. It is unfair to these organizations when intentional injury claims raise the cost for everyone.

However, proving what someone’s intentions were at a particular moment is difficult. If your organization has an incident that you believe might result in a liability claim, you should report it to your insurance agent as soon as possible. Let the insurance company investigate, and know that your insurance is there to protect you from the consequences of true accidents.