Friday, August !7, 2013
In a single occurrence, a child fired a single shot from a revolver belonging to his parents, killing a friend and seriously wounding another. The victims parents sued the child, his parents, and their insurance company.
The insurance policy provided a $300,000 limit for “Each Occurrence” of “Personal Liability.” The trial court multiplied the limits by the number of insured and ruled that the policy afforded $900,000 of coverage. The trial court explained that the child and his parents were each entitled to a separate per-occurrence policy limit.
The Issues on Appeal
The insurance company appealed because the policy provides only a single per-occurrence policy limit of $300,000 regardless of the number of insureds. The victims’ parents also appealed; they contend that not only were there three individual coverage limits, one each for Kevin and his parents, but there were also multiple occurrences.
Alaska Supreme Court Upholds Single Occurrence Clause
The Alaska Supreme Court decided in favor of the insurance company. The pointed out that the express language of the policy, the reasonable expectations of an insured, and case law, all hold that single occurrence clauses aren’t multiplied by the number of insured parties. They also rejected the claims that a single gun shot hitting two separate people was more than a single occurrence of harm.
An umbrella policy with higher limits is a better solution than trying to argue that lower limit policies can be multiplied. You can make business decisions on insurance coverage before an event. But, after the event is too late.