The son of homeowners was involved in an argument during a party. The argument ended with the son throwing another into a swimming pool and that person suffering a fractured clavicle. The homeowners were sued but their insurer, claiming that the incident was an intentional act, declined to even defend the lawsuit. The injured party, after settling with the homeowners based on an assignment of their rights, sued the insurer for coverage. The insurer appealed after a lower court ruled that coverage was due.

Click here to see the court's opinion on whether a deliberate action relieved the insurer's coverage obligation.

Insurance companies are experts on their coverage intent. They create or adopt forms for use with the various lines of business that make up their stable of products. One might assume that the constant challenge is to make sure that policies are updated to meet new exposures. However, more instances involving maintaining coverage intent is dealing with how claimants and courts continuously interpret existing language and assumptions.

Policies are intended to respond to a set of sources of accidental loss. With regard to liability coverage, covered losses are intended to respond to damage that arise from certain acts. Policy wording usually makes this clear by defining what is meant by coverage. The defining language may be in parts of the policy with special headings such as "Insuring Agreement" or "What Is Covered" or it may refer to a section of defined terms.

Click here for an excerpt of wording on covered acts found in the Homeowners section of Gordis on Insurance found in Advantage Plus.

Insurers do take steps to make clear what they wish to cover by their various products. Doing so is particularly important in personal lines products such as Homeowners Policies where consumers do not, generally, have special coverage knowledge, at least compared with many commercial insurance purchasers. However, it is critically important that HO coverage intent is well-known since, by volume, it makes up a large portion of the entire insurance market that is accompanied by many potential claims.

HO liability claims are composed primarily from losses that occur to those who visit residences and to persons with home property owners interact.

Click here for an excerpt of wording concerning what is meant to be covered found in the MPL 01 - MSO Common Provisions Form Analysis in PF&M.

Homeowner liability exposures are quite varied. Some exposures are related to what property owners do such as injuring another person while jogging. Some exposures are related to conditions of premises that are owned or controlled. Consider a guest at a summer picnic whose leg is broken when he falls into a hole in the host's backyard. Still other exposures may involve the combination of something property owners do with their possessions. One instance that involves precarious loss exposure are firearms.

Click here to see an article on gun liability from Emarketing for Agents found in Advantage Plus.