Personal Liability and Medical Payments to Others
Summary: The personal liability coverage in section II of the Insurance Services Office homeowners policy contains many coverage exclusions. These exclusions are the topic of the following discussion.
There are three sets of section II exclusions. The first set of twelve exclusions applies to both coverage E, personal liability, and coverage F, medical payments to others. Three of these exclusions—for motor vehicles, watercraft, and aircraft—are discussed separately as well as here. See Motor Vehicle, Watercraft, and Aircraft Liability Exclusions . The second set of six exclusions applies to coverage E only. The third set of four exclusions applies to coverage F only. (A separate set of exclusions for additional coverage 3, damage to property of others, is examined in the discussion of that coverage. See [IDL:Personal Liability—Additional Coverages] .
The following discussion is based on the 2011 forms edition, with applicable references to the 2000 edition.
All cases cited in this article have been chosen as examples of the differing coverage interpretations that are possible with the HO 00 03. Many of these cases have been cited in later decisions, and, although there have been dissenting opinions, none have been overturned as of this printing. However,the language of the 2011 forms has not yet wound its way through the courts, so different decisions may occur in the future.
Topics covered: Introduction The motor vehicle liability exclusion The watercraft liability exclusion The aircraft and hovercraft liability exclusions Expected or intended injury The business exclusions Insured locations The war exclusion Communicable disease Sexual or physical abuse The controlled substance exclusion “Residence employee” exceptions Coverage E—personal liability—exclusions Coverage F—medical payments to others—exclusions
Introduction
The liability exclusions in the 2011 homeowners forms are in the same format as the 2000 form. As a reminder, the terms in quotation marks are now found in the definitions section. Therefore, when reviewing the exclusions it is important to keep the definitions in mind.
1.”Aircraft liability”, “Hovercraft liability”, “Motor vehicle liability” and “Watercraft liability”, subject to the provisions in b. below, mean the following:
a.Liability for “bodily injury” or “property damage” arising out of the:
(1)Ownership of such vehicle or craft by an “insured”;
(2)Maintenance, occupancy, operation, use, loading or unloading of such vehicle or craft by any person;
(3)Entrustment of such vehicle or craft by an “insured” to any person;
(4)Failure to supervise or negligent supervision of any person involving such vehicle or craft by an “insured”; and
(5)Vicarious liability, whether or not imposed by law, for the actions of a child or minor involving such vehicle or craft.
b.For the purpose of this definition:
(1)Aircraft means any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people or cargo;
(2)Hovercraft means a self-propelled motorized ground effect vehicle and includes, but is not limited to, flarecraft and air cushion vehicles; and
(3)Watercraft means a craft principally designed to be propelled on or in water by wind, engine power or electric motor.
With this format, an exclusion can simply refer to “aircraft liability”; negligent supervision, entrustment, maintenance, occupancy, operation, use, loading or unloading are all thereby included within the scope of that term.
The Motor Vehicle Liability Exclusion
A.”Motor Vehicle Liability”
1.Coverages E and F do not apply to any “motor vehicle liability” if, at the time and place of an “occurrence”, the involved “motor vehicle”:
a.Is registered for use on public roads or property;
b. Is not registered for use on public roads or property, but such registration is required by a law, or regulation issued by a government agency, for it to be used at the place of the “occurrence”; or
c. Is being:
(1)Operated in, or practicing for, any prearranged or organized race, speed contest or other competition;
(2)Rented to others;
(3)Used to carry persons or cargo for a charge; or
(4)Used for any “business” purpose except for a motorized golf cart while on a golfing facility.
2.If Exclusion A.1. does not apply, there is still no coverage for “motor vehicle liability”, unless the “motor vehicle” is:
a.In dead storage on an “insured location”;
b.Used solely to service a residence;
c.Designed to assist the handicapped and, at the time of an “occurrence”, it is:
(1)Being used to assist a handicapped person; or
(2)Parked on an “insured location”;
d.Designed for recreational use off public roads and:
(1)Not owned by an “insured”; or (2) Owned by an “insured” provided the “occurrence” takes place:
(a)On an “insured location” as defined in Definition B.6.a., b., d., e. or h.; or
(b)Off an “insured location” and the “motor vehicle” is:
(i) Designed as a toy vehicle for use by children under seven years of age;
(ii) Powered by one or more batteries; and
(iii) Not built or modified after manufacture to exceed a speed of five miles per hour on level ground;
e.A motorized golf cart that is owned by an “insured”, designed to carry up to four persons, not built or modified after manufacture to exceed a speed of 25 miles per hour on level ground and, at the time of an “occurrence”, is within the legal boundaries of:
(1)A golfing facility and is parked or stored there, or being used by an “insured” to:
(a)Play the game of golf or for other recreational or leisure activity allowed by the facility;
(b)Travel to or from an area where “motor vehicles” or golf carts are parked or stored; or
(c)Cross public roads at designated points to access other parts of the golfing facility; or
(2)A private residential community, including its public roads upon which a motorized golf cart can legally travel, which is subject to the authority of a property owners association and contains an “insured’s” residence.
Analysis
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