There was a time when courts applied the Draconian rule ofcategorically denying recovery for emotional distress related towitnessing another person's injury or fearing for another person'ssafety. That practice was ultimately abandoned, and individualstoday can successfully recover damages for emotional distress andtrauma from witnessing harm to another.

No Pain, No Gain

Claim professionals may find that handling these types of“bystander” or “zone of danger” claims can be a difficult andcomplex process. First, they must determine whether thepsychological and/or emotional harm to the plaintiff is truly“bodily injury” as defined in the insurance policy. Under mostliability policies, insurers must pay damages for which the insuredis legally liable “because of bodily injury.” Thus, the plaintiffcannot recover if he did not sustain a “bodily injury” as definedby the policy.

If the emotional harm suffered is, in fact, bodily injury, thenthe insurance professional must decide whether the bystander'sclaim is subject to its own “each person” limit or whether it fallswithin the “each person” claim applicable to the injured party.Most courts that classify such bystander claims as “bodily injury”find that a separate limit should apply to the claims. Those thatmaintain otherwise typically find that the “each person” limitapplicable to the party that actually suffered the injury shouldapply.

Such is illustrated in the August 2008 Supreme Court ofConnecticut ruling in Taylor v. Mucci. The litigation involved theclaim of bystander emotional distress by a mother who, afterhearing a crash outside her home, went outside to find her16-year-old son lying motionless and bleeding. The car operated bythe insured defendant had struck the boy.

Although it was stipulated that the mother met the legalrequirements for a bystander emotional distress claim, the opposingparties disagreed as to whether the insured's policy allowed for anadditional recovery of that amount.

The key language of the policy, the supreme court decisionstated, was that the each accident limit is the most the company“will pay for all damages, including … emotional distress … arisingout of bodily injury sustained by two of more persons resultingfrom any one accident.”

The court concluded that the mother's claim of bystanderemotional distress did not constitute a bodily injury because thepolicy defined the term as “any bodily injury, sickness, disease,or death sustained by any person.” Emotional distress, withoutaccompanying physical harm, did not constitute a bodily injury.Thus, the mother could not recover damages under a separateper-person coverage limit. Only one bodily injury within themeaning of the policy occurred here — namely the injuries sufferedby the plaintiff's son — so the plaintiff could not recover underthe per-accident provision of the policy, which requires bodilyinjury to 'two or more persons.'”

Just a month before the Taylor verdict, the Montana SupremeCourt in Allstate Insurance Co. v. Terry Wagner-Ellsworth andTiffany Rusk held that bodily injury — within the realm of aninsurance policy — included a mental or psychological injuryaccompanied by physical manifestations.

In Wagner-Ellsworth, a mother, acting on her own behalf and thatof her son Brandon, asserted claims for emotional and physicalinjuries to both herself and to Brandon. They filed the actionagainst the insured motorist who had struck her other son, Matthew.Brandon and Matthew had been walking together in front of theirschool when the insured's vehicle struck Matthew, severely injuringhim.

The mother contended that both she and Brandon were traumatizedand suffered injury as a result of seeing Matthew run over, as wellas for enduring the ambulance ride to the hospital and the boy'srecovery. It was alleged that Brandon became withdrawn, and thatthe mother suffered from stress, migraines, heart palpitations whenshe heard sirens, physical pain, and depression.

The court stated that the policy's general statement of coveragestipulated that the insurer would pay damages an insured person waslegally obligated to pay “because of bodily injury sustained by anyperson …” Therefore, the insured's policy required payment fordamages that an insured person was legally obligated to coverbecause of bodily injury sustained by any person in a coveredaccident, whether to the claimant directly or to another.

In this case, the court determined that the mother's andBrandon's damages were inflicted “because of” Matthew's bodilyinjury. As such, their damages would be covered, regardless ofwhether they suffered the bodily injury themselves. However,although the injuries were covered, they were subject to the “eachperson” limit. There were no additional funds available under theinsured's policy because the limit applicable was exhausted inMatthew's settlement.

Of particular significance is the fact that the court overruleditself by finding “bodily injury” could be construed within aninsurance policy to include psychological anguish accompanied byphysical manifestations. Therefore, the mother's and Brandon'sclaims, to the extent they were based on physical manifestations ofthe emotional distress, fell within the “bodily injury” definitionof the policy and could be asserted on that basis. For theclaimants to do so would establish that there were two or morebodily injury claims in the accident, thus triggering the higher“each accident” monetary limits of the policy.

Conflicting Opinions

Recent decisions provide clarification as to whether a separate“each person” limit should apply to a bystander claim. This dependsprimarily on whether a court first determines that pureemotionally- or psychologically-rooted injuries are “bodily injury”as the terms are defined by a particular liability policy.

Yet, courts remain divided as to whether such emotional distressclaims, in an insurance context, constitute “bodily injury.” Somecourts take a more expansive approach to bystander claims thanrecently taken by the Connecticut and Montana high courts, holdinginstead that emotional harm does constitutes bodily injury,regardless of any accompanying physical manifestations. Othercourts hold that emotional harm does not constitute a bodilyinjury, also regardless of the presence of any physical harm.

Over the past decade or so, there has been a marked shift byvarious courts, similar to Montana, requiring that at least somesort of physical cause for the claim be present. This may encompassphysical symptoms displayed or at least an “impact” suffered thatled to the alleged mental distress.

Requiring a physical display of psychological stress can be ashort-sided solution, undoubtedly leaving bystanders who may besuffering very legitimate mental affliction but who are notexperiencing (or are unable to demonstrate) accompanying physicalsymptoms — with no clear recourse.

As recognized in Wagner-Ellsworth, distinguishing betweeninjuries with physical manifestations and those without them can bechallenging. It has been stated that “every emotional disturbancehas a physical aspect, and every physical disturbance has anemotional aspect.” Indeed, there is no litmus test for determiningwhere to draw the line between emotional and physical injuries. Forexample, a dry throat, a rise in body temperature, and a knot inthe stomach may be considered sufficient physical manifestations ofemotional distress to constitute bodily injury in one instance. Ina similar case, the loss of sleep and appetite simply may not makethe cut.

No one approach to this complex claim is without its flaws.However, relaxing the requirement that claimants demonstrate anyphysical manifestations whatsoever can only lead to a flood offrivolous claims and an onslaught of related litigation. Clearly,this result would be more problematic than any solution it mayoffer.

Kelly Maheu is assistant editor of FC&S. She specializesin commercial liability coverage and has experience in insurancedefense and research. She may be contacted [email protected].