Summary: The liability and medical payments coverages contained in the American Association of Insurance Services (AAIS) homeowners program fit the insurance needs of most insureds. (Coverage may be modified by endorsement to amend coverage where necessary—see Common Endorsements—AAIS Program.) Although in many ways the coverages and exclusions are similar to those found in the Insurance Services Office (ISO) Common Endorsements—AAIS Program program, there are significant differences.
Following is a discussion of the homeowners liability and medical payments coverages.
Topics covered:
Definitions applicable to liability coverage
Principal coverages—liability and medical payments to others
Incidental liability coverages
Exclusions applying to liability and medical payments coverages
Exclusions applying only to liability coverages
Exclusions applying only to medical payments
Introduction
As noted above, the coverages and exclusions of the AAIS and ISO programs are similar. There is a difference in the contract format, however. In the ISO form, the insuring agreement provides broad coverage which is narrowed through the use of exclusionary language. In the AAIS form, coverage is provided through the insuring agreement and through the use of incidental liability coverages, which incorporate coverage provisions and which, in the ISO form, include section II additional coverages. Certain other liability coverages are clearly enumerated, whereas in the ISO form they are provided through exceptions to a particular exclusion. However, the AAIS form concludes the liability section with exclusions applying either to liability coverage, medical payments coverage, or both.
Definitions Applicable to Liability Coverage
The definitions below are those applicable to liability coverages, and are numbered according to the numbers in the form itself. For the definitions applying to property coverage, see Property Coverages—AAIS Homeowners. As is common, “us,” “we” and “our” refer to the insurer.
1. See Property Coverages—AAIS Homeowners.
2. See Property Coverages—AAIS Homeowners.
3. ”Bodily injury” means bodily harm to a person and includes sickness, disease, or death. This also includes required care and loss of services.
”Bodily injury” does not mean bodily harm, sickness, disease or death that arises out of:
a. a communicable disease;
b. the actual, alleged, or threatened sexual molestation of a person;
c. mental or emotional injury, suffering, or distress that does not result from physical injury;
d. physical abuse;
e. corporal punishment; or
f. the use, sale, manufacture, delivery, transfer, or possession by any person of Controlled Substances as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812, including any amendments. Controlled Substances include but are not limited to cocaine, LSD, marijuana, and all narcotic or hallucinogenic drugs. However, this does not apply to the legitimate use of prescription drugs by a person following the orders of a licensed physician.
4. ”Business” means a trade, a profession, or an occupation including farming, all whether full or part time. This includes the rental of property to others. It does not include the occasional rental for residential purposes of the part of the “insured premises” normally occupied solely by “your” household.
”Business” includes services regularly provided by an “insured” for the care of others and for which an “insured” is not compensated. A mutual exchange of like services is not considered compensation.
”Business” does not include:
a. part-time or seasonal activities that are performed by minors; or
b. activities that are related to “business”, but are usually not viewed as “business” in nature.
5. See Property Coverages—AAIS Homeowners.
6. ”Domestic employee” means a person employed by an “insured” to perform duties that relate to the use and care of the “insured premises”. This includes a person who performs duties of a similar nature elsewhere for an “insured”. This does not include a person while performing duties in connection with the “business” of an “insured”.
7. ”Insured” means:
a. ”you”;
b. ”your” relatives if residents of “your” household;
c. persons under the age of 21 residing in “your” household and in “your” care or in the care of “your” resident relatives; and
d. ”your” legal representative, if “you” die while insured by this policy. This person is an “insured” only for liability arising out of the “insured premises”. An “insured” at the time of “your” death remains an “insured” while residing on the “insured premises”.
Under Coverage L and M, “insured” also includes:
e. persons using or caring for vehicles, watercraft, or animals owned by an “insured” as defined under a., b., or c. above and to which this insurance applies. (This does not include persons using or caring for vehicles, watercraft, or animals in the course of “business” or without the owner's consent):
f. persons in the course of or performing domestic duties that relate to the “insured premises”; and
g. persons in the course of acting as “your” real estate manager for the “insured premises”.
Each of the above is a separate “insured”, but this does not increase “our” “limit”.
8. ”Insured premises”
a. see Property Coverages—AAIS Homeowners.
b. Under Coverages L and M, “insured premises” also includes:
1) all other premises shown on the “declarations”;
2) that part of a residential premises, acquired by “you” during the policy period, and to be used by “you” as “your” place of residence;
3) all vacant land owned by or rented to an “insured”. This includes land where a “residence” is being built for the use of an “insured”. This does not include farm land;
4) ”your” cemetery lots and “your” burial vaults or those of “your” resident relatives;
5) that part of a premises not owned by an “insured” if it is temporarily used as a residential premises by an “insured”;
6) all premises used by “you” in connection with the premises shown on the declarations” as the described location;
7) all access ways immediately adjoining the “insured premises”; and
8) that part of a premises occasionally rented to an “insured” for other than “business” purposes.
Analysis
The lead-in language for the definition of “bodily injury” closely resembles that of the ISO form, but then diverges. Whereas the ISO form excludes coverage for items 3.a. through 3.f., the AAIS form eliminates coverage through stating that certain things are not considered “bodily injury” and therefore, by definition, no coverage exists. Note, however, that while in some jurisdictions “bodily injury” does not always include emotional distress, it is clear in this instance that “bodily injury” encompasses emotional distress so long as the emotional injury arises from “bodily injury.”
As discussed elsewhere see Property Coverages—AAIS Homeowners while providing any compensated care for others is considered a business, the activities normal to minors, such as baby-sitting, paper delivery, lawn mowing, etc., are not. The ISO form is silent on this matter. Also, activities that may occur in the course of business, but in and of themselves are not considered as “business” in nature, are not to be construed as “business.” So, for example, if in the course of a business meeting over dinner an insured accidentally ruins a client's expensive suit by spilling wine on it, the eating of the meal itself should not be viewed as a “business” activity, and therefore the damage done by the wine is covered. (Note the difference between this and the ISO wording, which states that coverage will not apply to bodily injury or property damage “arising out of or in connection with a 'business' engaged in by an 'insured.'” This leaves open the possibility that a dinner such as that described above could be construed as “in connection with a 'business' engaged in by an 'insured.'”)
A person having charge of vehicles, watercraft, or animals owned by an insured is also an insured, but not while in the course of a business. For example, if an insured's dog is at the vet's, and the vet negligently allows the dog to bite a customer, the vet cannot seek coverage under the AAIS policy as an insured.
It is interesting to note that, by definition, a person in the course of acting as an insured's real estate manager for the insured premises is considered an insured. If, therefore, an insured directed his or her agent to evict a tenant, and the agent inadvertently used excessive force, the agent could seek coverage if the tenant sued because of bodily injury.
The definition of “insured premises” includes cemetery lots, vacant land, land where another insured residence is being built, premises temporarily used as a residential premises, premises used in connection with the residence premises, and that part of a premises occasionally rented to an insured for other than business use, as well as any locations indicated on the declarations. These are common to both the AAIS and the ISO forms. The AAIS form, however, includes in its definition that access ways immediately adjoining the insured premises are to be considered as “insured premises.” Therefore, if the insured's child rides a snowmobile on the street directly in front of the insured's home, and the snowmobile skids into a parked car and damages it, the accident could be covered as occurring on the insured premises. Since access ways is not a defined term, conceivably a public road in front of the insured premises could be considered an access way.
9. see Property Coverages—AAIS Homeowners.
10. ”Motorized vehicle” means a self-propelled land or amphibious vehicle regardless of method of surface contact.
This does not include vehicles that are designed and used to assist the handicapped and are not required to be licensed for road use.
11. ”Motor vehicle” means a “motorized vehicle”, a trailer, or a semi-trailer, and all attached machinery or equipment, if:
a. it is subject to “motor vehicle” registration; or
b. it is designed for use on public roads.
12. ”Occurrence” means an accident, including repeated exposures to similar conditions, that results in “bodily injury” or “property damage” during the policy period. “
13. see Property Coverages—AAIS Homeowners.
14. ”Property damage” means:
a. physical injury or destruction of tangible property; or
b. the loss of use of tangible property whether or not it is physically damaged.
15. ”Recreational motor vehicle” means a “motorized vehicle”, a trailer, or attached equipment that is designed or is used for leisure time activities, and which is not a “motor vehicle”.
Analysis
The AAIS form, unlike the ISO form which does not define a motor vehicle, offers three definitions of a motor vehicle. Some motor vehicles fit more than one definition. The first of these is a “motorized vehicle,” which is any “self-propelled land or amphibious vehicle regardless of method of surface contact,” so that a snowmobile, golf cart, or riding lawn mower fall within this category. Vehicles not required to be licensed for road use which are designed to assist the handicapped are not “motorized vehicles.” The second category of motor vehicle includes “motorized vehicles” (that is, self-propelled land or amphibious vehicles regardless of how they make contact with the surface), trailers, semi-trailers, and all attached machinery and equipment, provided the “motor vehicle” is subject to motor vehicle registration or designed for use on public roads. Note that, by definition, a camper trailer is a “motor vehicle” if it meets the criteria. The final category of motor vehicle is a “recreational motor vehicle.” A camper trailer can fall into this category, since it is designed for leisure time activities; however, if a particular state requires a trailer be licensed so that it can be towed on a public road, it then falls into the definition of a “motor vehicle.” Golf carts, snowmobiles, or ATV's meet the definition of a “recreational motor vehicle.”
Principal Coverages—Liability and Medical Payments to Others
Coverage L—Personal Liability—”We” pay, up to our “limit”, all sums for which an “insured” is liable by law because of 'bodily injury” or “property damage” caused by an “occurrence” to which this coverage applies. “We” will defend a suit seeking damages if the suit resulted from “bodily injury” or “property damage” not excluded under this coverage. “We” may make investigations and settle claims or suits that “we” decide are appropriate. “We” do not have to provide a defense after “we” have paid an amount equal to “our” “limit” as a result of a judgment or written settlement.
Coverage M—Medical Payments To Others—”We” pay the necessary medical expenses if they are incurred or medically determined within three years from the date of an accident causing “bodily injury” covered by this policy. Medical expenses means the reasonable charges for medical, surgical, X-ray, dental, ambulance, hospital, professional nursing, and funeral services; prosthetic devices; hearing aids; prescription drugs; and eyeglasses, including contact lenses. This applies only to:
1. a person on the “insured premises” with the permission of an “insured”; and
2. a person away from the “insured premises” if the “bodily injury”:
a. is a result of a condition on an “insured premises”;
b. is caused by an activity of an “insured”;
c. is caused by a person in the course of performing duties as a “domestic employee”;
d. is caused by an animal owned by or in the care of an “insured”; or
e. is sustained by a “domestic employee” and arises out of and in the course of employment.
Analysis
The insuring agreement of the AAIS liability coverage section omits the ISO provision of a defense “even if the suit is groundless, false, or fraudulent.” This leaves open the possibility that, under the AAIS form, the insurer could decide a suit was groundless and therefore not provide a defense.
There is coverage for medical payments to others, either incurred or determined, within three years from the date of an accident resulting in covered bodily injury. In the ISO form, coverage applies if the injury occurs on an insured location or the ways immediately adjoining; in the AAIS form, coverage applies if the injury occurs on an insured premises or the ways immediately adjoining. However, while the ISO form differentiates an “insured location” from an “insured premises,” the AAIS form takes the approach that the “insured locations” are actually “insured premises” and defines them as such.
Note that medical payments coverage for a “domestic employee” injured away from the “insured premises” in the course of his or her employment is provided in the insuring agreement. The ISO form provides the coverage through an exception to exclusion 3.a.(1) and (2).
Incidental Liability Coverages
This policy provides the following Incidental Liability Coverages. They are subject to all of the “terms” of Coverages L and M. Except for Damage to Property of Others, Claims and Defense Cost, First Aid Expense, and Loss Assessment, they do not increase the “limits” states for the Principal Coverages.
1. Damage to Property of Others—Regardless of an “insured's” legal liability, “we” pay for property of others damaged by an “insured”, or “we” repair or replace the property, to the extent practical, with property of like kind and quality. “Our” “limit” for this coverage is $500 per “occurrence”.
The exclusions that apply to Coverages L and M do not apply to this coverage. However, “we” do not pay for damage to property:
a. owned by an “insured”, or owned by, rented to, or leased to another resident of “your” household or the tenant of an “insured”;
b. caused intentionally by an “insured who has attained the age of 13; or
c. resulting in whole or in part from:
1) activities related to a “business” of an “insured”;
2) premises owned, rented, or controlled by an “insured”, other than an “insured premises”; or
3) the ownership, operation, maintenance, use, occupancy, renting, loaning, entrusting, supervision, loading, or unloading of “motorized vehicles”, aircraft, or watercraft. “We” do pay for “property damage” to “motorized vehicles” not subject to “motor vehicle” registration and not owned by an “insured” if the “motorized vehicle” is used only to service the premises or if it is designed for recreational use off public roads.
Analysis
This coverage, often thought of as “good will” or “good neighbor” coverage, is usually intended to pay for a loss where the insured's liability is negligible; but, in the interests of preserving peace the insurance responds. However, the wording damaged by an “insured” suggests a direct physical cause-and-effect relationship; in other words, an insured must directly damage property of others. The coverage would therefore appear to be redundant in the light of the liability insuring agreement, although the wording “regardless of an 'insured's' legal liability” attempts to clarify the intent. The ISO wording caused by an insured allows action or inaction to begin the chain of events leading to the damage.
If the policy is not read carefully, this provision of coverage could be misleading. The insuring agreement for coverage C states the insurer covers “personal property owned by or in the care of an 'insured.'” If the “damage to property of others” provision is read in isolation, however, it appears that $500 is the most that will be paid for personal property of others that the insured has, for example, borrowed.
The insurer has the option to repair, replace, or pay for property of others damaged by an insured; under the ISO form the insurer will pay replacement cost up to $500.
Property damage to “motorized vehicles” is covered so long as they are not owned by the insured, not subject to motor vehicle registration, and used to service the premises or for recreational purposes. So, for example, a borrowed riding lawnmower could be covered under coverage C or the incidental liability coverage; a borrowed snowmobile is covered only under the incidental liability coverage.
2. Contracts and Agreements—”We” pay for damages for “bodily injury” or “property damage” where the liability of others is assumed by an “insured” under a written contract:
a. that directly relates to the ownership, maintenance, or use of an “insured premises”; or
b. if the contract was made before the loss.
The loss causing the “bodily injury” or “property damage” must have occurred during the policy period.
3. Claims and Defense Cost—If “we” defend a suit, “we” pay:
a. the costs taxed to an “insured”;
b. the costs incurred by “us”;
c. the actual loss of earnings by an “insured” for time spent away from work at “our” request (“We” pay up to $50 per day.);
d. the necessary costs incurred by “you” at “our” request;
e. the interest which accrues after the entry of a judgment, but ending when “we” tender or pay up to “our” “limit”;
f. the premiums on appeal bonds or bonds for the release of attachments up to “our” “limit”(“We” are not required to apply for or furnish bonds.);
g. the premiums up to $500 per bail bond required of an “insured” because of an accident or a traffic law violation arising out of the use of a vehicle to which Coverages L and M apply (“We” are not required to apply for or furnish bonds.); and
h. prejudgment interest awarded against an “insured” on that part of the judgment “we” pay. If “we” offer to pay the “limit”, “we” will not pay any prejudgment interest based on that period of time after the offer.
4. First Aid Expense—”We” pay the expenses incurred by an “insured” for first aid to persons, other than “insureds”, for “bodily injury” covered by this policy.
Analysis
Note that coverage for contractual liability only applies where the liability of others has been assumed under a written contract directly relating to the ownership, maintenance, or use of an insured premises, or if the liability of others is assumed by a written contract made prior to the loss. Other contractual liability is excluded. The ISO form does not restrict contractual liability to “hold harmless” situations, providing coverage where the contract directly relates to the ownership, maintenance or use of an insured location, or where the liability of others is assumed prior to an occurrence.
5. Motorized Vehicles—”We” pay for the “bodily injury” or “property damage” which:
a. occurs on the “insured premises” and is a result of the ownership, maintenance, use, loading, or unloading of:
1) a “motorized vehicle” if it is not subject to “motor vehicle” registration because of its type or use; or
2) a “recreational motor vehicle”.
b. results from:
1) a golf cart while used for golfing purposes;
2) a utility, boat, camp or mobile home trailer. However, this coverage does not apply to “bodily injury” or “property damage” resulting from a trailer which:
a) is carried on, towed by, or attached to a “motor vehicle” or a “recreational motor vehicle”; or
b) becomes detached while being carried on or towed by a “motor vehicle” or a “recreational motor vehicle”; or
3) a “motorized vehicle” which is designed only for use off public roads and which is used mainly to service the “insured premises”. However, this coverage does not apply to “bodily injury” or “property damage” which results from a “motorized vehicle ” owned by an “ insured” while used for recreational purposes away from the “insured premises”, other than a golf cart while used for golfing purposes.
c. results from an “insured's” use of a “recreational motor vehicle” which is not owned by an “insured”.
Analysis
As noted earlier in this discussion, the AAIS format is to describe what liability coverage is provided in the incidental liability coverages, while the ISO treatment is to exclude coverage and then give back coverage through exceptions. The above provisions exemplify this. The AAIS language describes the instances in which coverage applies to a motorized vehicle; the ISO form excludes liability arising from a motor vehicle and then states when the exclusion will not apply.
There is coverage for the use of a motor vehicle designed for use off public roads used mainly to service the insured premises, for a non-owned recreational motor vehicle, for a golf cart while used for golfing purposes, and for an owned recreational motor vehicle used on the insured premises, and for the use of a non-owned recreational motor vehicle away from the insured premises.
6. Watercraft—
a. ”We” pay for the “bodily injury” or the “property damage” which results from the maintenance, use, loading, or unloading of:
1) a watercraft while it is on the “insured premises”;
2) a watercraft which is not owned by or rented to an “insured” if the loss is a result of the activities of an “insured”;
3) a watercraft which is not owned by an “insured” and which is powered by inboard or inboard/outboard engines or motors which total 50 horsepower or less;
4) a sailing vessel with or without auxiliary power which is owned by or is rented to an “insured” and is less than 26 feet in overall length;
5) a watercraft which is powered by outboard engines or motors which total 25 horsepower or less; or
6) a watercraft which is in storage.
b. ”We” pay for the “bodily injury” or the “property damage” which results from the maintenance, use, loading, or unloading of a watercraft that is powered by outboard engines or motors which total more than 25 horsepower, if:
1) the engines or motors are acquired by an “insured” prior to the policy period and:
a) they are listed on the “declarations” as insured for personal liability; or
b) a request for liability coverage is made within 45 days after they are acquired;
2) the engines or motors are acquired by an “insured” during the policy period; or
3) the engines or motors are not owed by an “insured”.
Analysis
Note that liability coverage attaches to any watercraft so long as it is on an insured premises. So, for example, if a neighbor's child alighted from the insured's boat moored at the insured's private dock, and slipped and fell, the injury would be covered. There is liability coverage for a watercraft that is not owned or rented to an insured, no matter what horsepower. Coverage also applies to a non-owned watercraft (the ISO form includes non-owned but excludes rented watercraft) with no more than 50 horsepower inboard or inboard/outboard engines or motors, a watercraft powered by not more than 25 horsepower outboard motor, a watercraft in storage, or a sailing vessel under 26 feet in overall length.
7. Business—”We” pay for the “bodily injury” or the “property damage” which results from:
a. the rental of that part of the “insured premises” that is usually occupied by “you” as a residence;
b. the rental of other parts of the “insured premises” for use as a residence (No family unit may include more than two roomers or boarders); or
c. the rental of a part of the “insured premises” for use as a school, studio, office, or private garage.
Analysis
There is coverage for the occasional rental of the part of the insured premises normally occupied by the named insured. The AAIS wording makes this point with the phrase usually occupied by “you”, whereas the ISO wording states that the rental may be on an occasional basis. However, the AAIS form does not specify that the rental must be for residential purposes only.
8. Loss Assessment—”We” pay for “your” share of an assessment made by “your” homeowners, condominium, mobile homeowners, or similar residential association if the assessment:
a. results from “bodily injury” or “property damage” to which Coverages L and M apply; or
b. is for damages or legal fees the association legally must pay for the acts of a director, officer, or trustee which result from the exercise of his or her duties solely on behalf of the association. This applies only to the acts of a director, officer, or trustee who is elected by the members of the association and who serves without receiving a fee, salary, or other compensation.
However, “we” do not pay for assessments charged against “you” or “your” association by any governmental body or authority.
Coverage applies only when the assessment is made during the policy period and is charged against “you” as owner or tenant of the premises shown on the “declarations” as the described location.
The most “we” pay is $1,500 per occurrence. Regardless of the number of assessments, this “limit” is the most “we” pay for loss arising out of:
a. any one accident, including repeated exposures to similar conditions; or
b. an act of a director or trustee. An act involving more than one director or trustee is considered a single act.
Under Policy Conditions, Policy Period does not apply to this coverage.
Analysis
Loss assessment in the amount of $1500 (the ISO form provides $1000) is available for damages or legal fees the insured as a member of an association of property owners becomes obligated to pay because of a covered incident. Excluded from coverage is an assessment by any governmental body. So, for example, if as a result of a property tax increase all condo owners are assessed an additional amount, there is no coverage.
Exclusions Applying to Liability and Medical Payments Coverages
As noted previously in this discussion, the format of the AAIS form is such that many of the liability coverages are given in the incidental liability coverages section. Although the following section contains the exclusions, there are provisions of coverages in the exceptions.
“We do not pay for “bodily injury” or “property damage” resulting from one or more of the following excluded “occurrences”, regardless of other causes or “occurrences” that contribute to or aggravate the “bodily injury” or “property damage”, whether such causes or “occurrences” act to produce the “bodily injury” or “property damage” before, at the same time as, or after the excluded “occurrence”.
Analysis
Note the presence of concurrent causation language preceding the exclusions. Unless an exception to an exclusion is contained within the exclusion itself, there can be no other contributing factor to an excluded event that will allow for coverage. This is unique to the AAIS form; the ISO form does not contain similar language.
1. Exclusions That Apply to Coverages L and M—This policy does not apply to:
a. ”bodily injury” or “property damage” which results from war. (This includes undeclared war, civil war, insurrection, rebellion, revolution, warlike act by a military force or military personnel, or destruction, seizure, or use of property for a military purpose. Discharge of a nuclear weapon is deemed a warlike act even if accidental.)
b. ”bodily injury” or “property damage” which results from the ownership, operation, maintenance, use, occupancy, renting, loaning, entrusting, supervision, loading, or unloading of aircraft, except for “bodily injury” to a person while performing duties as a “domestic employee”. However, this exclusion does not apply to model aircraft which is not designed or used to carry people or cargo.
c. ”bodily injury” or “property damage” which results from the ownership, operation, maintenance, use, occupancy, renting, loaning, entrusting, supervision, loading, or unloading of “motorized vehicles”, trailers, or watercraft owned or operated by or rented or loaned to an “insured”. However, we do pay:
1) for “bodily injury” to a person in the course of performing duties as a “domestic employee”; or
2) if coverage is provided by an Incidental Motorized Vehicle or Watercraft Coverage.
d. ”bodily injury” or “property damage” which results from the use of a “motorized vehicle” in, or in the practice or preparation for, racing, speed, pulling or pushing, demolition, or stunt activities or contests.
Analysis
There is liability coverage for an insured for bodily injury to a domestic employee while in the course of employment if the injury arises from ownership, maintenance, or use of an aircraft, a motorized vehicle, or a watercraft.
Note that, although there is liability coverage for the use of a “motorized vehicle” on the insured premises, there is no coverage for that same vehicle if the bodily injury or property damage results from the vehicle while engaged in racing or stunt activities. So, for example, if an insured decides to arrange a stunt competition for snowmobilers on his or her own property, and a passenger on the insured's vehicle is injured, there is no coverage.
e. ”bodily injury” or “property damage” that results from liability imposed by law on an “insured” for the use of a “motorized vehicle”, aircraft, or watercraft, except if coverage is provided by an Incidental Motorized Vehicle or Watercraft Coverage.
f. ”bodily injury” or “property damage” that results from the rendering of or the failing to render a professional service.
g. ”bodily injury” or “property damage” resulting from activities related to the “business” of an “insured”, except as provided by Incidental Business Coverage.
h. ”bodily injury” or “property damage” which results from premises that are owned, rented, or controlled by an “insured” and that are not the “insured premises”. However, “we” do pay for “bodily injury” to a person in the course of performing duties as a “domestic employee”.
Analysis
Although liability coverage for “activities related to the 'business' of an 'insured'” are excluded, remember that activities not normally thought of as businesslike in nature are covered. Therefore, if an insured attends a business seminar, and negligently trips another participant, any resulting injury is covered. If, however, the insured is a physician and attends to the other participant's injury, with a resulting suit for malpractice, there is no coverage under the homeowners form, since this is “rendering a professional service.”
There is no coverage for bodily injury or property damage arising out of any premises owned, rented to, or controlled by an insured, other than the insured premises. However, there is coverage for bodily injury to a domestic employee while in the course of his or her duties if such injury occurs at another premises.
i. ”bodily injury” or “property damage”:
1) which is expected by, directed by, or intended by an “insured”;
2) that is the result of a criminal act of an “insured”; or
3) that is the result of an intentional and malicious act by or at the direction of an “insured”.
This exclusion applies even if:
1) the “bodily injury” or “property damage” that occurs is different than what was expected by, directed by, or intended by the “insured”; or
2) the “bodily injury” or “property damage” is suffered by someone other than the person or persons expected by, directed by, or intended by the “insured”.
However, this exclusion does not apply to “bodily injury” or “property damage” that arises out of the use of reasonable force to protect people or property.
j. ”bodily injury” or “property damage” that results from an “occurrence” for which an “insured” is also an insured under a nuclear energy liability policy or would be an insured but for the exhaustion of its “limits”. (A nuclear energy liability policy is a policy issued by American Nuclear Insurers, Mutual Atomic energy Liability Underwriters, Nuclear Insurance Association of Canada, or their successors.)
Analysis
Note the provision of coverage for a reasonable action taken to protect persons or property. There is no like provision in the ISO form. So, for example, if an insured witnessed a burglar climbing up a ladder into the insured's children's bedroom, reasonable force used to protect the children is covered under the AAIS form, even force resulting in expected and intended injury. The ISO form makes no exception to the exclusion, so, in the scenario described above, the ISO form would not respond.
Note as well that the AAIS form closes a sometimes troublesome gap in the ISO form, and that is for injury or property damage that is different than that intended by an insured. For example, an insured could intend to punch someone in a brawl, but hit an innocent bystander instead. Under the ISO form, the result, not being expected or intended, could be covered (depending upon the jurisdiction). Under the AAIS form, however, although the bodily injury is not what the insured intended, the resulting injury is still excluded.
Exclusions Applying only to Liability Coverages
2. Coverage L does not apply to:
a. ”bodily injury” to “you”, and if residents of “your” household, “your” relatives and persons under the age of 21 in “your” care or in the care of “your” resident relatives.
b. liability assumed under a contract or an agreement, except as provided by Incidental Contracts and Agreements Coverage.
c. damage to property owned by an “insured”.
d. damage to property that is rented to, occupied by, used by, or in the care of an “insured”, except for “property damage” caused by fire, smoke, or explosion.
e. sickness, disease, or death of a “domestic employee” unless a written notice is received by “us” within 36 months after the end of the policy period in which the injury occurred.
f. ”bodily injury” to a person, including a “domestic employee”, if the “insured” has a workers compensation policy covering the injury or if benefits are payable or are required to be provided by the “insured” under a workers' compensation, non-occupational disability, occupational disease, or like law.
g. liability for any assessment made by “your” homeowners, condominium, mobile homeowners, or similar residential association, except as provided by Incidental Loss Assessment Coverage.
Analysis
The above exclusions are common to both the AAIS and the ISO forms. Two of the exclusions of coverage—2.b., liability assumed under contract, and 2.g.,loss assessment—exclude coverage except as provided under the incidental liability coverages. Property damage to property owned by an insured is excluded. There is no coverage for property rented to, occupied by, used by, or in the care of an insured except for loss resulting from fire, explosion, or smoke (this is sometimes referred to as the “fire legal liability” clause).
Note that, in event of any loss involving bodily injury that results in sickness, disease, or death of a domestic employee, the insurer must be notified within 36 months after the end of the policy period in which the injury occurred.
Exclusions Applying Only to Medical Payments
3. Coverage M does not apply to “bodily injury” to:
a. an “insured” or other person who resides on the “insured premises”, except a “domestic employee”.
b. a person who is on the “insured premises” because a “business” is conducted or professional services are rendered on the “insured premises”.
c. a person, including a “domestic employee”, if a workers' compensation policy covers the injury or if benefits are provided under a workers' compensation, non-occupational disability, occupational disease, or like law.
Analysis
Members of the insured's household—those meeting the definition of an “insured”—or any other person except a domestic employee residing on the insured premises are excluded from medical payments coverage.
Excluded from medical payments coverage are persons on the insured premises because a business is conducted there. There is no similar exclusion contained in the ISO form. Note, however, that the exclusion of coverage does not apply to liability for bodily injury or property damage arising from: the rental of the part of the insured premises normally occupied by the insured for residential purposes; the rental of another part of the insured premises for residential purposes; or the rental of part of the insured premises for use as a school, studio, office, or private garage.