The assault and battery exclusion in the commercial general liability (CGL) policy has an interesting history. However, most of us are not history buffs, at least regarding insurance coverage. We just want to get to the point. So, let’s skip most of the assault and battery (A&B) history and discuss the typical A&B exclusion including when a policy covers A&B and when coverage may be questionable.
Tort law defines an assault as the threat of harm which causes fear in the reasonable person. Battery is the actual impact, such as striking or grabbing another person.
A LexisNexis article says the A&B exclusion appears in policies to limit claims from places that serve alcohol such as bars and restaurants. These locations often attract rowdy customers who may injure other customers. The exclusion is also common for risks that include lodging such as apartments or hotels, especially those that are located in an area with a high rate of crime. Generally, insurers want to limit the risk of insuring locations where the following can happen:
- Damage from assault or battery involving bouncers or security personnel
- The use of firearms
Insurers “usually exclude such causes from an assault, battery, or shooting.”
Many businesses face the possibility of violence due to an unruly customer, employee, or tenant. What is a business or property owner to do? Carefully reviewing your coverage can help ensure you have the appropriate protection.
What is the Assault and Battery Exclusion?
Some general liability and liquor liability policies have an assault and battery exclusion. Generally, insurance covers only fortuitous acts. These involve damage to property or bodily injury from a normal business exposure. One example of such an act is someone tripping and falling at your business. With liquor liability,
- fights may be more common and
- claims arising out of self-defense may occur if your bar has bouncers.
In general business exposures absent alcohol, under the general liability coverage form, A&B claims are less common.
Why Do Insurers Exclude Assault and Battery Coverage?
The intent of the A&B exclusion is to keep insurers from paying for injuries you “expect or intend.” “But I’m defending myself,” you may say. In that case, the insurer will usually defend you until a jury reaches a guilty verdict if you are charged with assault. However, no business owners want to find themselves in a situation where the A&B exclusion affects coverage.
Sample Liability Policy Wording and Assault and Battery Exclusion Wording
Insurers often rely on the words “expected or intended” when they investigate an A&B claim. Many insurers use a standard form that limits coverage for an expected or intended injury. The Insurance Services Office developed this commercial general liability coverage form and it is used widely in the industry. Below is wording from that form.
This insurance does not apply to: a. Expected or Intended Injury
“Bodily injury” or “property damage” expected or intended from the standpoint of the insured. This exclusion does not apply to “bodily injury” resulting from the use of reasonable force to protect persons or property.
The final words, “the use of reasonable force to protect persons or property” means that coverage may or may not apply. Whether it applies depends heavily on the circumstances of the event. Here is one coverage interpretation of this exclusion under the CGL.
Other insurers attach an A&B exclusion endorsement. This endorsement can apply to the commercial general liability form. Or it can apply to the liquor liability coverage form. How A&B coverage is worded depends on the carrier. Here, here and here are various links to A&B endorsements and exclusions with typical A&B wording.
Be sure to read your own commercial liability policy. That will help you better understand any A&B coverage exclusions that may apply to your policy. Working with an experienced broker who can guide you toward a carrier that will write A&B can help ensure you avoid a coverage predicament.
What is the Impact on the Insured of the Assault and Battery Exclusion?
For the typical insured under his or her homeowners policy, the assault and battery exclusion or the exclusion for intentional acts is straightforward. Don’t get into a fight with your neighbor or a friend and you won’t have a problem. However, if you run a business, an A&B exclusion can be problematic. While most business-situated assaults involve alcohol according to one insurance expert, you can’t always control who comes onto your premises. Fights can occur in any type of business, from a grocery store to a dog grooming shop.
Your broker or agent can review your liability policies with you. This review will help ensure you understand any policy limitations regarding A&B exclusions.
Sublimits on Assault and Battery Coverage
A sublimit in a policy limits the amount of coverage available for that specific type of loss. Let’s look at one recent case, Catlin Specialty Insurance Group versus RFB, Inc. The insurer’s policy had a $25,000 coverage sublimit for A&B. The insured had requested intentional acts coverage for its entire policy amount based on allegations of its negligence. Nevertheless, the court found that the A&B exclusion applied. Under that policy, the court determined coverage applied only up to the sublimit for the incident. An experienced agent can help you determine if any liability sublimits apply in your policy.
Also be aware of endorsement language that some insurers use. Endorsements may include defense and investigation costs for any A&B claims within the sublimits. For example, the insurer’s endorsement has a $50,000 sublimit of A&B coverage. This means that the $50,000 is not to settle the plaintiff’s damage claim. That $50,000 goes to investigate and defend the claim and pay the plaintiff’s award. This language can make a significant difference because defense costs can be expensive.
Final Thoughts on Assault and Battery Coverage
Whether you have a commercial general liability policy or a liquor liability policy, the assault and battery wording under your coverage form is critical in today’s unpredictable world. Whether coverage applies in the case of self-defense is a decision made by the courts.
It’s important that you understand the nuances of the intentional act wording under your policy. Also watch for any A&B exclusions in your coverage form. Working with an experienced insurance agent is your best defense against an uncovered claim.