INSURED’S PREMISES NOT AN INSURED LOCATION

This exclusion expressly provides that the liability and medical payments coverages do not apply to bodily injury or property damage arising at premises that do not qualify as insured locations. WAR This exclusion precludes coverage for bodily injury and property damage caused directly or indirectly by war, which is defined in a manner that probably would be ruled not to include acts of terrorism, whether domestic or foreign. 120 The Complete Book of Insurance COMMUNICABLE DISEASE The communicable disease exclusion precludes coverage for bodily injury and property damage arising out of the transmission of a communicable disease by an insured. Insurers first sought to have exclusions in their homeowners policies for sexually-transmitted diseases in the late 1970s and early 1980s. During that time, herpes type II (i.e., genital herpes) cases first became widespread and insurers found themselves defending a great many lawsuits arising out of such claims. After AIDS and HIV became an issue of public concern, it was claimed by gay-rights and certain ethnic-group rights organizations that exclusions for sexually-transmitted diseases were discriminatory. As a result, the exclusion was broadened by substitution of the phrase communicable disease for sexually-transmitted disease. SEXUAL MOLESTATION, CORPORAL PUNISHMENT, OR ABUSE This exclusion precludes liability and medical payments coverage for bodily injury or property damage arising out of sexual molestation, corporal punishment, or physical or mental abuse. Insurers have included some form of sexual molestation exclusion in the liability portions of homeowners policies for some time now. These exclusions have generated a great deal of litigation over a variety of issues. The insurance industry continues through its drafting efforts to attempt to make clear that coverage should not be capable of being purchased for claims of this nature. CONTROLLED SUBSTANCES The controlled substances exclusion precludes liability and medical payment coverage for bodily injury and property damage arising out of the use, sale, manufacture, delivery, transfer, or possession of controlled substances. There is Liability Coverage Exclusions 121 an exception for bodily injury or property damage arising out of the legitimate use of prescription drugs by a person following a licensed physician’s orders. Examples of how this exclusion might apply include the following. ◆ If an insured injures another person or damages another’s property while under the influence of a controlled substance, the bodily injury or property damage would arise from the use of a controlled substance and coverage would most likely be precluded. ◆ If a fire or explosion resulted from an insured’s illegal drug lab and damaged adjoining properties, coverage would be precluded for any resulting lawsuits against the insured. ◆ If an insured furnished controlled substances to a third party, who injured him- or herself while under the influence of the controlled substance, coverage would be precluded for a resulting bodily injury suit against the insured. CONTRACTUAL LIABILITY This exclusion applies only to the liability coverage. It does not apply to the medical payments coverages. The contractual liability exclusion has two parts. First, coverage is precluded for loss assessments by homeowners associations except as is provided for in the liability additional coverages, as outlined in Chapter 9. Second, this exclusion precludes coverage for liability of an insured under any contract or agreement. There are two exceptions to this latter portion of the contractual liability exclusion. The exclusion does not apply to written contracts that directly relate to the ownership, maintenance, or use of the insured locations. Nor does this exclusion apply to written contracts under which the insured assumes the liability of others, prior to any occurrence, except as would otherwise be excluded by other policy provisions. 122 The Complete Book of Insurance OWNED PROPERTY This exclusion also applies only to the liability coverage. It precludes coverage for property owned by an insured and applies to costs and expenses incurred by an insured or others to repair, replace, enhance, restore, or maintain such property to prevent bodily injury or property damage to others, whether on or off premises. The purpose of this exclusion is to limit the coverage applicable to an insured’s own property to that which is afforded by the first-party property coverages of a homeowners policy. RENTAL PROPERTY The rental property exclusion applies only to the liability coverage and precludes coverage for property damage to property rented to, occupied by, used by, or in the care of an insured. There is an exception to this exclusion for property damage caused by fire, smoke, or explosion. WORKERS COMPENSATION The workers compensation exclusion applies only to the liability coverage and precludes coverage for bodily injury to any person who is eligible to receive benefits provided or required to be provided by any insured under any: ◆ workers compensation law; ◆ nonoccupational disability law; or, ◆ occupational disease law. In many states now, homeowners policies are required to include workers compensation coverage for residence employees. Under the ISO HO 2 and HO 3 policies, it is added by way of an endorsement to the policy. Many insurers include workers compensation coverage for residence employees (housekeepers, gardeners, nannies, etc.—whether resident or not) within their basic policy forms, usually as one of the liability additional coverages. Liability Coverage Exclusions 123 NUCLEAR This exclusion is straightforward and precludes coverage for bodily injury or property damage for which an insured under the policy is also an insured under a nuclear energy liability policy issued by various entities. Nuclear exclusions are standard exclusions under policies issued to almost every personal lines and homeowners insured. In a practical sense, when the provisions of the nuclear exclusion are reviewed, there are few conceivable ways in which a homeowner could have such a loss exposure. BODILY INJURY TO INSUREDS This exclusion precludes coverage for bodily injury to yourself or to another person qualifying as an insured under the first two paragraphs of a HO 2 or HO 3 policy’s definition of an insured. This exclusion also extends to any claim or suit against an insured to repay or share damages with another person who may be obligated to pay damages because of bodily injury to an insured. In other words, this latter provision excludes coverage for a suit by a third party against an insured for indemnity or for contribution to sums that the third party has or may be held liable to pay as damages for bodily injury to another person qualifying as an insured. The following example should help you to understand what this means. EXAMPLE: A third party is present at a party at your house. He engages in an altercation with one of your sons and injures him. Your son sues the third party and recovers damages for his injuries. The third party turns around and sues you for indemnity or contribution. He does this on the ground that some act or omission on your part was the cause of the injuries to your son—for example, providing alcohol. Therefore he claims that you should be held liable for some or all of the damages. This provision would exclude coverage for such a suit. 124 The Complete Book of Insurance MEDICAL PAYMENTS COVERAGES EXCLUSIONS The next group of exclusions is a short group that applies only to the medical payments coverages, several of which are substantially similar to many of the previous group of exclusions that apply only to the liability coverages. Residence Employees Off Premises This exclusion precludes medical payments coverage for residence employees if bodily injury occurs away from an insured premises and does not arise out of or occur within the course of employment of the residence employee by an insured. Both of these conditions must exist for this exclusion to apply. As a result, this is a narrow exclusion. In other words, if bodily injury to a residence employee occurs off premises, but within the course of employment, the medical payments coverage applies. Similarly, if the bodily injury to a residence employee occurs at an insured location, the medical payments coverage applies even if the bodily injury did not occur within the course of employment. Workers Compensation As with the liability coverage, the medical payments coverage does not apply to bodily injury to any person eligible to receive benefits pursuant to any workers compensation, nonoccupational disability, or occupational disease law. As with the liability coverage, workers compensation coverage is required to be provided by homeowners policies in many states. Nuclear As with all other portions of the ISO HO 2 and HO 3 homeowners policies, medical payments coverage does not apply to bodily injury from nuclear reaction, radiation, or radioactive contamination, however caused. Residents This exclusion provides that the medical payments coverage does not apply to any person who regularly resides on any part of any insured location, except for residence employees. Liability Coverage Exclusions 125 Other Comments Exclusions applicable to the liability and medical payments coverages do not vary widely from insurer to insurer. Some insurers include exclusions for punitive or exemplary damages. In most, but not all, states, the punitive damages are noninsurable as a matter of law, although there are a few states where there is no such public policy. In those states, if insurers wish to avoid coverage for punitive damages, a separate exclusion needs to be included

Aucun commentaire