An exclusion on a homeowners policy pertaining to injuries arising out of a premises that is not an insured location applies even if the condition of the premises did not actually cause the injury. This was the view of an appeals court in Massachusetts in Commerce Insurance Company v. Theodore, 841 N.E.2d 281 (Mass. App. Ct. 2006).

 

Theodore had a homeowners policy issued by Commerce Insurance for his primary residence. Theodore also owned other property that was not insured under any policy. A friend was on this other property helping Theodore cut down a tree when the friend fell from a ladder after the ladder began to shift and was injured. The friend brought a lawsuit against Theodore alleging negligence; Theodore turned the lawsuit over to Commerce which filed a declaratory judgment seeking judicial determination that it had no duty to defend or indemnify Theodore. This was based on an exclusion in the policy that applied to coverage for personal liability and medical payments to others arising out of premises owned by an insured that is not an insured location.

 

The trial court ruled that the exclusion did not apply because the injuries of the friend did not arise out of the uninsured premises, but from the shifting ladder. Upon appeal, the appeals court said this interpretation of the “arising out of“ language was too narrow. For an injury to “arise out of“, it is enough if it is reasonably apparent that there is a causal connection between the injury and the use to which the premises are put. In this case, the friend was on the property to repair a condition of the property and in the course of this repair, he was injured. This injury is, thus, one that arises out of a premises, since there is a sufficiently close relationship between the injury and the premises.

 

The appeals court ruled that the condition of the premises need not actually cause the injury; a close causal connection is sufficient. The exclusion applied and the judgment of the trial court was vacated.