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New exclusions New exclusions can be found in: (g) Aircraft, Auto or Watercraft exclusion revision Due to an increasing number of negligent supervision claims involving "autos", exclusion g. Aircraft, Auto Or Watercraft has had an additional paragraph added: This exclusion applies even if the claims allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by an insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that is owned or operated by or rented or loaned to any insured. In a Massachusetts case, Worchester Mut. Ins. Co. v. Marnell, 496 N.E. 2d 158 (Mass. 1986), a homeowners policy was at issue. However, the language involved was similar to that contained in the CGL. The underlying action consisted of a negligent supervision claim that resulted from an automobile accident. The plaintiff sought damages from the named insureds under the policy, who had allowed their son, an unnamed insured, to have a party at their house where alcoholic beverages were consumed. The son then struck and killed a person while driving his guests home. In the resulting suit, the parent's liability insurer denied the claim, citing the exclusion which barred recovery for injury arising out of the ownership, maintenance or use of motor vehicles. The son owned and operated the motor vehicle involved in the fatal accident. The insurer argued that, even though the plaintiff based the claim on negligent supervision by the parents, the exclusion still applied as the exclusion looks only to the manner in which the injuries occurred. The court disagreed and included that the motor vehicle exclusion was inapplicable to the parent' coverage claim as the parents neither owned nor operated the vehicle. (j) Property Damage exclusion revision One section of Exclusion j. Damage to Property has been changed. It involves exclusion j.1. "Property damage" to: (1) Property you own, rent or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property;... In Aetna Insurance Company v. Aaron, 112 Md. App. 472, 685 A.2d 858 (1996), a Maryland Court of Special Appeals involving a condominium owner held that the insurance company was required to defend and indemnify a condominium owner as defendant in a suit brought by the condo association. The association sued to recover costs to repair a glass enclosure in the insured's condo to prevent further damage to a third party's condo. This revision is intended to forestall a demand on the CGL in a similar way. New exclusions - Coverage B Criminal Act The wording in the Criminal Act exclusion was modified from a criminal act committed "by any insured" to a criminal act committed "by the insured." Essentially, use of word "the" provides vicarious liability coverage for insureds not directly involved in the act. It should be noted that the original wording was "the." Changes to Commercial General Liability in 1998 changed it to "any." Changes in 2001 reverted it back to "the." Infringement of Copyright, Patent, Trademark or Trade Secret A new exclusion is "personal and advertising injury" arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights. However, this exclusion does not apply to infringement, in your "advertisement" of copyright, trade dress or slogan. Insureds in Media and Internet Type Businesses The exclusion is extended to "personal and advertising injury" committed by an insured whose business is: However, this exclusion does not apply to Paragraphs 14.a., b. and c. of "personal and advertising injury" under the Definitions Section. For the purpose of this exclusion, the placing of frames, borders or links, or advertising, for you or others anywhere on the Internet, is not by itself considered the business of advertising, broadcasting, publishing, or telecasting. A specific exception to this exclusion has been added to grant coverage to an insured who allows others to advertise on their Website. Electronic Chatrooms or Bulletin Boards Insureds that host chatrooms or bulletin board services may find themselves without coverage due to exclusion k. Electronic Chatrooms or Bulletin Boards: "Personal and advertising injury" arising out of an electronic chatroom or bulletin board the insured hosts, owns, or over which the insured exercised control. As a side note, if you defame someone in a chatroom, is it libel or slander? If you said, "slander," you're correct. An excluded loss example: A visitor to the Website accesses the insured's chatroom and places defamatory material on the chat room page and causes the injured party to sue the insured. Unauthorized Use Of Another's Name Or Product The final new exclusion is exclusion l. Unauthorized Use Of Another's Name Or Product concerning "personal and advertising injury" arising out of the unauthorized use of another's name or product in your e-mail address, domain name or metatag, or any other similar tactics to mislead another's potential customers. The rise of intentional acts of this nature was the reason behind this new exclusion. An excluded loss example: The insured's uses a list of key words (metatags) that allow Internet users to identify the insured's site. Included on that list is another company's trade name. The company sues the insured for infringement of trade name. |
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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and Insurance Skills Center, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.
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