This month’s case is a, forgive the pun, dog-eat-dog situation. Two pairs of persons were out in public, walking their dogs. A lawsuit arose because, when the pairs approached each other on a street, one party’s dogs attacked and caused serious injuries to the others. The attack was not provoked and the owners of the injured dogs sought compensation for the physical harm to their pets. Further, they also demanded compensation for the trauma they suffered from observing the attack.

The person being sued asked her homeowner insurer for assistance, but her request for coverage was turned down. The insurance company’s position was that her policy excluded protection involving dog attacks. In return, the policyholder sued her insurer, claiming she was owed, minimally, a legal defense. Specifically, she alleged breach of contract.

Click below to see the trial and appellate courts’ stances on what obligations may have existed and why.

Please click on the link to get more details on the court case.

America remains a nation of pet-lovers, particularly dogs and cats. Many of us are quite familiar with its joys, primarily companionship, protection and even improved home security. However, the above case revolves around a darker element: legal liability for injury or damage that our pets may cause to others.

In the past, coverage for actions of pets was, as it is today, bundled in with the rest of the liability protection found in homeowners policies. For so long, claims involving dog bites were negligible, not triggering any special concern with insurance companies.

Increasingly, the severity and frequency of biting have increased, creating insurer reaction to minimize their impact including underwriting rules targeting certain dog breeds, use of animal liability exclusions, and terminating coverage after bite claims occur.

Click here for information on dog bites. It is from Emarketing for Agencies found in Advantage Plus.

The two levels of courts that addressed the dog attack viewed the situation quite differently. That is common. Remember that original court results are appealed precisely because one litigant argues that the decision is wrong. The way that an issue is viewed is filtered by how the issue is first presented. In this case the lower and upper court viewed things primarily through the lenses of, respectively, the insurer and the policyholder.

In turn, the insurer’s filter appeared to be that, regardless the circumstances surrounding the attack, the policy contained a specific animal liability exclusion. Their argument at both levels embraced an intent of applying the exclusion. As the higher court proved, it’s important that an insurer view its obligations to its customers broadly. The focus on the exclusion seemed to blind the insurer.

Click here to see an excerpt of a tool that could assist in exploring possible exposures within a given homeowners risk. It is from the Personal Lines Risk Survey found in Advantage Plus.

Here’s a fork in the path that we suggest being taken in order to have a clearer view of problematic claims. Thankfully, most instances of litigation that seem to involve tunnel vision are, through the lens of hindsight, understandable. Insurers know that serving the public means responding to losses quickly and responsibly. However, that does not automatically mean accessing and transferring funds to handle every loss presented. It means fulfilling contractual obligations, by addressing losses as merited. That means denials are often the correct move.

On the other hand, insurance professionals must be aware that sensitive issues can’t be ignored when they arise. It is critical that all parties approach disputes in a fair, genuine manner. Advocating for policyholders is always foremost in performing our jobs. That occurs both when assisting in explaining losses that don’t qualify for coverage and in pointing out to insurers in the, hopefully, rare instances when coverage is rightfully due.

Click here to see an article excerpt touching upon different points of view that may exist between producers and insurers. The article is from the 12/11 edition of Rough Notes Magazine, found in Advantage Plus.