Examining Assault and Battery Exclusions in CGL Policies

• Pages: 23-63
• Date: 01 January 2023
• Published date: 01 January 2023
• Author: Douglas R. Richmond
• Subject Matter: Derecho Público y Administrativo

23

Douglas R. Richmond is Managing Director at Aon Professional Services, Olathe, KS.

Opinions expressed here are solely those of the author.

EXAMINING ASSAULT AND BATTERY EXCLUSIONS

IN CGL POLICIES

Douglas R. Richmond

I. Introduction ...................................................................................23

II. Defining “Assault” and “Battery” ..................................................30

III. Interplay with the Intentional Acts Exclusion

and Alleged Ambiguity ...................................................................33

A. Overview .................................................................................33

B. Where Ambiguity Arguably Lurks .........................................35

C. Summary and Synthesis ..........................................................43

IV. The Scope of the Assault and Battery Exclusion ..........................46

A. “Arising Out of” or “Arising from” Assault and Battery ........46

1. Representative Cases ..........................................................48

2. Summary .............................................................................51

B. Separate Claims or Causes of Action ......................................53

V. Concurrent Causation ...................................................................56

A. Overview .................................................................................56

B. Illustrative Cases .....................................................................57

C. Analysis .................................................................................... 61

VI. Conclusion ..................................................................................... 63

I. INT RODUCTION

Owners and operators of apartments, bars and taverns, clubs, event venues,

hotels and motels, restaurants, shopping centers, and many other organiza-

tions function in environments with the potential for roughness, whether

involving their clients or customers, employees, guests, members, resi-

dents, or visitors. Litigation arising out of assaults, batteries, and physical

Tort Trial & Insurance Practice Law Journal, Winter 2023 (58:1)24

altercations on their properties or at their events is a material risk for these

businesses or groups. When they are sued, they usually ask their liability

insurers to defend and indemnify them.1

In most cases, these insureds will seek protection under their commer-

cial general liability (CGL) policies.2 Coverage under a CGL policy for

an assault or battery, or other torts arising out of an assault or battery,

is often disputed. First, for there to be coverage under a standard CGL

policy, the injury for which the insured has been sued must be caused by

an “occurrence.”3 A standard CGL policy defines “occurrence” as “an acci-

dent, including continuous or repeated exposure to substantially the same

general harmful conditions.”4 An assault or battery is not an “accident” and

thus cannot constitute an “occurrence.”5 This result is also consistent with

the courts’ view that fortuity is essential to liability insurance coverage.6

Second, if the policyholder can establish the existence of an “occurrence,”7

1. See generally Tom Baker & Kyle D. Logue, In Defense of the Restatement of Liability Insur-

ance Law, 24 G. M L. R. 767, 767 (2017) (“For most non-contractual legal claims for

damages that are brought against individuals or firms, there is some form of liability insurance

coverage.”); Kenneth S. Abraham, Tort Luck and Liability Insurance, 70 R U. L. R. 1,

10 (2017) (“[R]oughly three-quarters of commercial and organizational defendants’ potential

liabilities are covered by liability insurance.”).

2. See Douglas R. Richmond, The “Occurrence” Battleground, N A C

C I  I. L., Fall 2021, at 5, 5 (“For businesses, basic liability protection typi-

cally takes the form of a commercial general liability (CGL) policy.”).

3. Ins. Servs. Off., Inc., Commercial General Liability Form (CG 00 01 04 13), at 1 (2012)

[hereinafter CGL Coverage Form].

4. Id. at 15.

5. Country Mut. Ins. Co. v. Dahms, 58 N.E.3d 118, 127 (Ill. App. Ct. 2016); see, e.g., Farm

Bureau Mut. Ins. Co. of Idaho v. Cook, 414 P.3d 1194, 1197–99 (Idaho 2018) (concluding that

where a campground’s caretaker shot a camper during an altercation at the insureds’ camp-

ground, there was no “occurrence” because the camper’s injuries resulted from the caretaker’s

assault); Kinaya v. Hanover Ins. Co., No. 3558879, 2022 WL 1707, at *4 (Mich. Ct. App. Nov.

17, 2022) (concluding that there was no “occurrence” where an angry employee slapped a cell

phone out of a customer’s hand); Talley v. Mustafa, 911 N.W.2d 55, 67 (Wis. 2018) (“Accident

is not defined in the policy, but no one . . . contends that Scott’s act of intentionally punching

Talley in the face was an accident. One cannot ‘accidentally’ intentionally punch someone in

the face. Talley does not argue otherwise. Rather, he insists that Mustafa negligently trained

and supervised Scott by failing to tell him not to hit people. Talley asserts that Mustafa’s

conduct is an occurrence separate and distinct from Scott’s intentional act. We disagree.”).

6. See generally Aetna Cas. & Sur.Co. v. Commonwealth, 179 S.W.3d 830, 836 (Ky. 2005)

(“[T]he requirement that loss be fortuitous . . . is a concept inherent in all liability policies.”).

7. It is the insured’s burden to establish the existence of an “occurrence.” See Wakonda

Club v. Selective Ins. Co. of Am., 973 N.W.2d 545, 549 (Iowa 2022) (“Wakonda Club has the

initial burden of showing its claim falls within the policy’s coverage.”); Maxie v. Bates, 338

So. 3d 564, 569–70 (La. Ct. App. 2022) (“When determining whether or not a policy affords

coverage for an incident, it is the burden of the insured to prove the incident falls within the

policy’s terms.”); Zurich Am. Ins. Co. v. Ironshore Specialty Ins. Co., 497 P.3d 625, 630 (Nev.

2021) (“In Nevada, the burdens of production and persuasion rest with the insured, who

has the initial burden of proving that the claim falls within policy coverage.”). If there is no

“occurrence,” the court’s analysis should end because the insured’s claims do not fall within

the policy’s initial coverage grant. Talley, 911 N.W.2d at 66; see also Krause v. Kerns, 476 P.3d

Examining Assault and Battery Exclusions in CGL Policies 25

another hurdle to obtaining coverage lies in the “Expected or Intended

Injury” exclusion in standard CGL policies, commonly described as an

intentional acts exclusion.8 This exclusion provides that the policy gener-

ally does not apply to “‘[b]odily injury’ or ‘property damage’ expected or

intended from the standpoint of the insured.”9 Assault and battery are clas-

sic intentional torts.10

There are, however, numerous scenarios where an assault or battery

committed on an insured’s property or at an insured’s event may qualify

as an “occurrence” or fall outside an intentional acts exclusion.11 In addi-

tion, standard CGL policies include a separation of insureds provision, so

that, in some cases, the policy will apply separately to each insured against

whom a claim is made, or a lawsuit is brought.12 To generally avoid cov-

ering losses arising out of assaults and batteries, an insurance company

may endorse an assault and battery exclusion onto a policyholder’s CGL

policy.13 A standard CGL policy does not otherwise contain an assault and

battery exclusion.

Assault and battery exclusions trace back years and, from the insurers’

perspective, were born of necessity.14 Insurers’ efforts to exclude coverage

829, 834 (Kan. Ct. App. 2020) (“If there was no occurrence, then there is no policy coverage

and thus no need to look to any other policy provisions of inclusion or exclusion.”).

8. CGL Coverage Form, supra note 3, at 2.

9. Id.

10. White Pine Ins. Co. v. Taylor, 165 A.3d 624, 636 (Md. Ct. Spec. App. 2017).

11. See Penn-Am. Ins. Co. v. White Pines, Inc., 476 F. Supp. 3d 354, 362–64, 365–67 (E.D.

Va. 2020) (reasoning that two patrons’ attack on a strip club manager was an “occurrence”

from the perspective of the club’s owner, but going on to hold that the assault and battery

exclusion in the policy precluded coverage); Essex Ins. Co. v.Yi, 795 F. Supp. 319, 324 n.2

(N.D. Cal. 1992) (explaining why an assault and battery exclusion would preclude coverage

where an intentional acts exclusion would not).

12. CGL Form, supra note 3, at 13.

13. An insurer also may endorse an assault and battery exclusion onto a liquor liability

policy, which does not contain an assault and battery exclusion in its standard form. Alterna-

tively, under either a CGL policy or a liquor liability policy, an insurer may offer coverage

for assault and battery claims with a sublimit. See, e.g., Burlington Ins. Co. v. De La Puente,

719 F. App’x 615, 618 (9th Cir. 2018) (“[T]he policy language is not ambiguous. Coverage for

liability arising out of an assault or battery is limited to $25,000. The endorsements related

to injuries arising out of assault or battery . . . unmistakably disclose that they modify the

insurance coverage provided under the Commercial General Liability Form.”); First Mercury

Ins. Co. v. Sudderth, 620 F. App’x 826, 828 (11th Cir. 2015) (involving a policy with a $2mil-

lion aggregate limit but with an “Assault & Battery Coverage Endorsement” that lowered

the liability limit to $100,000 for “[c]laims or suits to recover damages for bodily injury or

property damage based upon, related to, arising out of, directly or indirectly resulting from, in

consequence of, in any way connected to, or in the sequence of events involving any actual or

alleged assault and/or battery,” and stating that the sublimit did not nullify the policy’s assault

and battery coverage but merely reduced the amount of coverage); Espinosa v. Accor N. Am.,

Inc., 148 So. 3d 244, 253–58 (La. Ct. App. 2014) (explaining the operation of a $25,000 assault

and battery sublimit).

14. Although assault and battery exclusions may appear in liquor liability and other types

of liability insurance policies, this Article focuses on their use in the CGL context because