Terri and Edward Bowman owned property containing a home and an apartment building. The premises were insured under a homeowner policy from Allstate Insurance Company, which included a typical exclusion for losses related to an insured’s business activities.
Terri Bowman ran Gentle Creek Horse Farm from her property, boarding and breeding horses as well as offering riding lessons. In 1995, Terri decided to have a horse barn and riding area built. During construction of the barn, Aaron Brotzman, a worker, was injured in a fall. Brotzman sued the Bowmans for damages and the Bowmans filed the loss with Allstate. The insurer denied the claim because of their policy’s business exclusion. The Bowmans sued, alleging Allstate owed a duty to defend and, if necessary, to settle the claim. Allstate requested a summary judgment and the district court granted one in the insurer’s favor.
The Bowmans appealed the decision. While they agreed that Terri did operate a business, they argued that the loss was unrelated to the excluded activity. In their opinion, Brotzman was injured while building a structure, an activity that is eligible for coverage under the homeowner policy. The court saw things differently. Brotzman was performing work that was directly related to the Gentle Creek operation. If it were not for the business activity, Brotzman would not have been on the property. Therefore, the loss arose out of an insured’s business activity which is clearly excluded under the homeowner policy. The appeals court affirmed the district court decision.
Edward A. Bowman and Terri L. Bowman, Plaintiffs-Appellants, v. Allstate Insurance Company, Bo-Ty, Inc. and Aaron Brotzman, Defendants-Appellees. No. 00-7218, U.S. 2nd Circuit Court of Appeals. Filed February 5, 2001. Affirmed http://laws.findlaw.com/2nd/007218.html (downloaded 6/27/01)