B.     ”Watercraft Liability”

 A “watercraft” is defined as a “craft principally designed to be propelled on or in water by wind, engine power or electric motor.” And, similar to the definition of “motor vehicle liability”, the form contains within the definition of “watercraft liability” liability arising out of entrustment, vicarious liability (whether or not statutorily imposed), and failure to supervise or negligent supervision. Coverage applies through exception to the watercraft exclusion.

 There is no coverage for any watercraft (even those that are otherwise covered by exception within the exclusion) if, at the time of an “occurrence,” the watercraft is: being used to carry persons or cargo for a charge; rented to others; or used for any business purpose. Also excluded is coverage for any craft participating in any organized race, other than a sailboat or a nonexcluded craft participating in a predicted log cruise. (A log cruise is similar to a road rally in that navigation skills, rather than speed, are tested.)   

 Any “stored” watercraft is covered. Presumably, the storage could be anywhere—on the residence premises or in a marina. If a child was playing on a stored watercraft and fell off, his injuries would be covered. (The injuries arose out of the “ownership” of the stored boat.)

 An owned sailboat less than twenty-six feet in length, with or without auxiliary power, is covered. A sailboat greater than twenty-six feet rented to an insured is not covered, but a borrowed sailboat greater than twenty-six feet is covered.

 Watercraft that are not sailboats and are powered by inboard or inboard-outdrive engines or motors or by water jet pumps are covered only if the engine, motor or pump is 50 horsepower or less and the craft is rented to or borrowed by an insured. A watercraft with 50 or more horsepower is covered only if the craft has been borrowed by an insured. In other words, there is no coverage for any owned watercraft that is powered by an inboard, inboard-outdrive, or water pump engine or motor. Note the inclusion of engines that power a water jet pump—a reference to personal watercraft such as wet bikes or jet skis.

 There is more liberal coverage for crafts powered by outboard motors. Any watercraft powered by one or more outboard motors with less than twenty-five total horsepower is covered. If the watercraft is powered by one or more outboard motors with more than twenty-five total horsepower, it is covered if the craft is rented or borrowed by an insured. An owned craft having motors more than twenty-five total horsepower is covered if acquired during the policy period, or if acquired before the policy period and the insured either declares the watercraft at inception, or notifies the insurer in writing of the intent to insure them within 45 days after acquisition.

 This “automatic” coverage for the owned watercraft with greater than twenty-five total horsepower applies only for the duration of the policy period.

 As discussed under the definition of “insured,” a person or organization having legal responsibility for a covered watercraft is also an insured, but not if using the watercraft in the course of any business. Also, the exclusion for watercraft liability does not apply to “bodily injury” to a “residence employee” arising out of and in the course of the “residence employee's” employment by an “insured.”

 The Aircraft and Hovercraft Liability Exclusions

 C. “Aircraft Liability”

     This policy does not cover “aircraft liability”.

D. “Hovercraft Liability”

     This policy does not cover “hovercraft liability”.

 Referring again to definitions, an “aircraft” is “any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people or cargo.” A “hovercraft” is a “self-propelled motorized ground effect vehicle and includes, but is not limited to, flarecraft and air cushion vehicles.” An air cushion vehicle is one that moves upon a cushion of air generated by engines on the craft. A flarecraft or wing in ground effect vehicle is one in which the engines provide enough thrust so that the wings enable the vehicle to rise up to twenty feet above land or water.

 Although the form states there is no aircraft or hovercraft liability coverage, in fact, “bodily injury” to a “residence employee” arising out of and in the course of the residence employee's employment by an insured is covered. For example, say an insured requested that her residence employee load her luggage on her private plane, and in so doing the residence employee injured his back, there would be coverage unless some type or workers compensation benefits are required to be provided.

 The exception for residence employees appears later in the form, following the exclusion for bodily injury or property damage arising out of a controlled substance. Seethe heading “Residence Employee” Exclusions.  

 Expected or Intended Injury

 E. Coverage E—Personal Liability and Coverage F—Medical Payments to Others

     Coverages E and F do not apply to the following:

1. Expected or Intended Injury

     ”Bodily injury” or “property damage” which is expected or intended by an “insured” even if the resulting “bodily injury” or “property damage”:

a. Is of a different kind, quality or degree than initially expected or intended; or

b. Is sustained by a different person, entity, or property, than initially expected or intended.

     However, this exclusion E.1. does not apply to “bodily injury” or “property damage” resulting from the use of reasonable force by an “insured” to protect persons or property;

 The form states that there is no coverage even if the resulting injury or damage is not what was initially expected or intended, or if the injury or damage occurs to another person or property from what was originally intended. The fact that an injury or damage was intended at all is enough for the resulting injury or damage, even if to an unintended subject, to be excluded. However there is an exception for “bodily injury” and “property damage” that results from the use of reasonable force (not defined) to protect persons or property. This allows an insured to defend himself or property when threatened, for example from an attacker or burglar. The inclusion of the ability to protect property by force is new to the 2011 form.

 Many courts have taken the view that if the insured intended any harm, the exclusion bars coverage even if the degree of actual harm is much greater than the insured anticipated. This rule was followed in the case of Kennedy v. State Farm Fire and Casualty Co., 738 F. Supp. 511 (S.D. Georgia 1990). In Kennedy, a federal district court found that the insured was not covered for liability arising out of injuries he inflicted on another man in a fist fight, even though the insured claimed that this was his first physical fight with anyone and that he therefore had no expectation of causing the injuries.  For a review of the different approaches courts have taken on the intentional acts exclusion, see Expected or Intended.

The Business Exclusions

 2. “Business”

a. “Bodily injury” or “property damage” arising out of or in connection with a “business” conducted from an “insured location” or engaged in by an “insured”, whether or not the “business” is owned or operated by an “insured” or employs an “insured”.

This Exclusion E.2. applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the “business”.

     This exclusion E.2. does not apply to:

(1) The rental or holding for rental of an “insured location”;

    (a) On an occasional basis if used only as a residence;

    (b) In part for use only as a residence, unless a single family unit is intended for use by the occupying family to lodge more than two roomers or boarders; or

   (c) In part, as an office, school, studio or private garage; and

(2) An “insured” under the age of 21 years involved in a part-time or occasional, self-employed “business” with no employees;

 New in the 2011 form, the second paragraph emphasizes that coverage does not apply for any professional service or duty rendered, promised, owed or implied. Any such coverage belongs on a professional liability policy, not on a homeowners policy. A “business” includes a trade, occupation or profession “engaged in on a full-time, part-time or occasional basis,” although activities generating no more than $2000 for an insured for the twelve months before the beginning of the policy period are exempt. (For more information, see ISO Homeowners Definitions.)

 The language excluding coverage for liability “arising out of or in connection with” a business engaged in by an insured, is quite broad. An incident can easily arise “in connection with” a business—think of a business trip where an insured businessperson negligently trips someone in a hotel. If the insured had not been on the trip, the incident would not have occurred. But at what point is the person walking (perhaps going to lunch) distinguished from the person's activities “in connection with” the business? As the appellate judge complained in Calvin Thoele v. Aetna Casualty & Surety, 39 F.3d 724 (7th Cir. 1994): “we are more than a little puzzled as to why insurers… have not attempted a better articulation of the exception.”

 Note that the wording explicitly excludes liability arising out of a business “conducted from an 'insured location'”—perhaps a nod to the increasing number of home-based businesses and amount of telecommuting. An insured might think that a business conducted from or engaged in from the home is not a “business” since it takes place in the home; nonetheless, it is a business and, as such, liability coverage is excluded. See ISO Home Based Business Coverage—Liability for a discussion of available coverage for this exposure.

 The business exclusion bars coverage for liability with respect to rental property, with certain exceptions. Exempt from the exclusion is rental or holding for rental of an insured location (1) on an occasional basis if used only as a residence; (2) in part for use only as a residence, but not if there are more than two roomers or boarders in a single family unit; or (3) in part as an office, school, studio, or private garage. The three rental exceptions allow coverage for some common rental situations.

 The first exception allows coverage to continue when the residence is rented to others on a short term or temporary basis with the intention by the owner of returning at a later time. A secondary vacation residence by a lake, used by the insured but also sometimes rented to others, is an example.  So is the rental of a residence for the summer—or for an even longer period—by a teacher while on summer vacation or on a sabbatical with the intent to return and resume occupancy later. If an insured owns property regularly rented to others for residential purposes, then endorsement HO 24 70 10 00, formerly HO-70 (additional residence rented to others), may be used to provide section II coverage for locations that do not qualify as insured locations under the policy by defining premises listed on the endorsement as “insured locations.”

 The second exception allows rental of one apartment in a four-family dwelling, provided none of the renting families take in more than two roomers or boarders, i.e., more than two persons who are either roomers or boarders. Portions of the insured's own household premises rented to more than two roomers or boarders are also subject to the exclusion.

The third exception allows rental of space on an “insured location” for limited kinds of business occupancies, such as for an office, studio, or private garage.

 The exclusion does not apply to “insureds” under the age of twenty-one who are involved in a part-time, self-employed business that has no employees. Although many courts have held that money earned by minors could not meet the test of a “profit” motive, it is good to have such language in the policy. See, for example, AMCO Insurance Company v. Beck et al., 929 P.2d 162 (Kan. 1996). 

 3. Professional Services

“Bodily injury” or “property damage” arising out of the rendering of or failure to render professional services;

 Analysis

 Since the language of the business exclusion (described above) excludes “acts or omissions, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the business”—a defined term that includes trade, profession, or occupation—the separate professional services exclusion has become redundant. Nonetheless, this exclusion has been carried over intact from earlier homeowners policies.

 Insured Locations

4. “Insured's Premises Not an “Insured Location”

     ”Bodily injury” or “property damage” arising out of a premises:

a. Owned by an “insured”;

b. Rented to an “insured”;

c. Rented to others by an “insured”;

     that is not an “insured location”;

 “Insured location” is a defined term in the homeowners policy, embracing nine kinds of premises that qualify for coverage. No liability coverage is available for owned or rented premises that do not fit one of these nine categories—for example, a dwelling owned at inception of the policy and not listed in the declarations. But the exclusion applies only to liability “arising out of” the premises; an injury is not excluded unless the cause of the injury in some way relates to a condition of the premises. An accidental injury, for example, is not excluded simply because it happens to take place on excluded premises. The exclusion applies only if some causal relationship between a condition of the premises and the accident can be shown.

 This interpretation is supported in Economy Fire & Casualty Co. v. Second National Bank, 414 N.E.2d 765 (Ill. App. Ct. 1980). In this case, the court held that the insured was covered for homeowners liability when the match that he tossed into his rented office's wastebasket caused extensive fire damage to the entire building. The court found that tossing the match into the wastebasket was not an excluded act related to a business pursuit (presumably under the unrevised business pursuits exception) and that the loss was not related to a defect at the premises.

 This exclusion does not apply to “bodily injury” to a “residence employee” arising out of and in the course of the “residence employee's” employment by an “insured.”

 The War Exclusion 

5. War

“Bodily injury” or “property damage” caused directly or indirectly by war, including the following and any consequence of any of the following:

a. Undeclared war, civil war, insurrection, rebellion or revolution;

b. Warlike act by a military force or military personnel; or

c. Destruction, seizure or use for a military purpose

    Discharge of a nuclear weapon will be deemed a warlike act even if accidental;

Analysis

 The war risks exclusion is similar to the war exclusion of the section I property insurance. It lists all the kinds of activities that are considered to be war (and therefore excluded) in addition to formally declared war. Among them are undeclared war; civil war; insurrection; rebellion; revolution; warlike acts by a military force or military personnel; destruction, seizure, or use for a military purpose; including any consequence of any of them, and discharge of a nuclear weapon, even if accidental.

 Communicable Disease

 6. Communicable Disease

“Bodily injury” or “property damage” which arises out of the transmission of a communicable disease by an “insured”;

 Analysis

 This exclusion was adopted in response to the increased frequency of suits alleging negligent transmission of diseases, particularly sexually transmitted diseases.  Note that the exclusion is not limited to diseases that are sexually transmitted, applying as it does to any “communicable disease.” This term is not defined, leaving some doubt as to the extent of its application.  However, the language “transmission of a communicable disease by an insured” (emphasis added) suggests only person-to-person transmission by direct physical contact, so the exclusion does not seem to apply to “contagious” diseases transmitted by airborne particles—measles, scarlet fever, H1N1, etc.—nor to diseases that are transmitted through food or water contamination (i.e., salmonella, botulism, typhoid fever, etc.), even where their spread may be traced to human carelessness. Nonetheless, it remains to be seen what interpretation the courts will give to this exclusionary language. As of this printing no cases other than those involving sexually transmitted diseases have reached the courts. However, the appellate court in Jose Plaza v. General Assurance Co., 244 A.D.2d 238 (N.Y. App. Div. 1997), noted that “the term 'communicable disease' could include a communicable disease that is not transmitted by sexual contact, and, in fact, includes any disease that is communicable… [the term] alone does not render the exclusion unduly broad.”

 Sexual or Physical Abuse

 7. Sexual Molestation, corporal Punishment or Physical or Mental Abuse

 ”Bodily injury” or “property damage” arising out of sexual molestation, corporal punishment or physical or mental abuse; or

 Although most courts have found that an insured is not covered for liability arising out of sexual molestation—particularly of children—because of exclusion E.1.a. and E.1.b. (the intentional acts exclusion), at least one jurisdiction did not initially follow this reasoning where the insured submitted evidence of a mental disorder or compulsion. In Allstate Insurance Co. v. Glenn Troelstrup, 789 P.2d 415 (Col. 1990), the Colorado Supreme Court overturned a lower court's holding that homeowners liability coverage applied to a man who had sexually molested a 12-year-old boy. Since the effect of the insured's mental incapacity (and resultant inability to form an intent to harm) is an issue that continues to create uncertainty for insurers under the intentional acts exclusion, the current homeowners program clarifies that there is no coverage for liability for the types of harm described in this exclusion.

 Generally, courts hold that no matter how a case is presented (many insureds contending there was no intent to harm) there is no coverage; the thinking is that coverage for such acts is against public policy. But when the abuse is perpetrated on one child by another, the courts are divided. A slight majority holds that the exclusion still applies; the remainder holds that children are incapable of forming an intent, and victims should be recompensed.

 Sometimes a case may include a charge against parents for negligent supervision. Again, courts are divided. In Meridian Mutual Ins. Co. v. Bidle, 149 F.3d 1183 (C.A.6 Mich.1998), the court upheld a lower court decision that coverage was excluded for a mentally impaired boy who sexually abused neighbor children. The parents' liability was derivative of his and therefore also excluded. But in C. P. v. Allstate Ins. Co., 996 P.2d 1216 (Alaska, 2000), the insureds' grown son intentionally sexually abused an eleven-year-old girl in their home while they were out of town. The court found that the acts were incidental to the negligence of the insureds in not warning neighbors about their son, and that the negligence was the primary cause of the injury.

 Controlled Substance Exclusion

 8. “Bodily injury” or “property damage” arising out of the use, sale, manufacture, delivery, transfer or possession by any person of a Controlled Substance(s) as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812. Controlled Substances include but are not limited to cocaine, LSD, marijuana and all narcotic drugs. However, this exclusion does not apply to the legitimate use of prescription drugs by a person following the lawful orders of a healthcare professional.

 The 2011 form has changed the language from licensed physician to healthcare professional. This broadens the number of people from whom an insured can receive a prescription for drugs, such as a nurse practitioner. Drugs that are included within the scope of the exclusion must meet the definition of a controlled substance as defined by federal law (i.e., 21 United States Code Annotated, sections 811 and 812).  For example, narcotics, hallucinogens, and psychotropic drugs are “controlled substances”, but alcohol is not.  The exclusion itself states that controlled substances include, but are not limited to, cocaine, LSD, marijuana, and narcotics, but the exclusion does not preclude coverage for liability arising “from the legitimate use of prescription drugs by a person following the orders of a healthcare professional.” So, for example, the exclusion does not bar coverage if a person correctly using a narcotic or anti-depressant that has been prescribed by his doctor causes injury or property damage because of a reaction to the drug. The prescription must be lawful; therefore an insured using marijuana must have a lawful recommendation from a provider for medical usage in the states that allow medical marijuana for treatment of pain and other issues.

 However, the intentional acts exclusion (exclusion E.1.a.) may apply to some cases that are not reached by this exclusion. For example, if an insured gives Rohypnol (also known as ecstasy or the date rape drug) to a friend, who dies as a result, the exclusion of bodily injury that is expected or intended, even if of a different kind than originally intended, should prevail. Courts are still in disagreement, though, on the issue of whether an insured lacks the capacity to form an intent when intoxicated by alcohol, and similar disagreements are likely to apply to insureds reacting to prescription drugs.

 “Residence Employee” Exceptions

      Exclusion A. “Motor Vehicle Liability”, B. “Watercraft Liability”, C. “Aircraft Liability”, D. “Hovercraft Liability”, and E.4. “Insured's” Premises Not An “Insured Location” do not apply to “bodily injury” to a “residence employee” arising out of and in the course of the “residence employee's” employment by an “insured”.

 As discussed under individual exclusions, there is coverage for “bodily injury” to “residence employees” in situations where normally coverage would not apply.  

 Coverage E—Personal Liability—Exclusions

 The following six exclusions apply to coverage E—personal liability, but not to coverage F—medical payments.

F. Coverage E—Personal Liability

     Coverage E does not apply to:

1. Liability:

a.For any loss assessment charged against you as a member of an association, corporation or community of property owners, except as provided in D. Loss Assessment under Section II—Additional Coverages;

 The exclusion clarifies the intent of the policy rather than taking away coverage. Coverage for loss assessments levied against owners-in-common because of inadequate insurance on their behalf by the association to cover property or liability claims is not, and was never intended to be, included in the personal liability coverage.

 Instead, separate loss assessment coverage is available under the additional coverages for section I and section II. Exclusion F.1.a. tracks with the language of the loss assessment additional coverage.

 b. Under any contract or agreement entered into by an “insured”. However, this exclusion does not apply to written contracts:

(1) That directly relate to the ownership, maintenance or use of an “insured location”; or

(2) Where the liability of others is assumed by you prior to an “occurrence”;

     unless excluded in a. above or elsewhere in this policy;

 Analysis

 This exclusion applies to liability “under any contract or agreement,” but then exempts two major kinds of written contracts from the exclusion, thereby allowing coverage for liability assumed under most written contracts unless coverage is excluded elsewhere in the policy.  Exempt from the exclusion is liability under written contracts: (1) that relate directly to the ownership, maintenance or use of an insured location, or (2) where the insured has assumed the liability of others prior to an “occurrence” as defined in the policy.

 Although any written contract directly related to an “insured location” is exempt from the exclusion, only liability of others assumed by “you”—that is, the named insured and spouse—is covered.

 Although some might interpret exemption (1) as including coverage for the insured's liability in any circumstance under a contract relating to the ownership, maintenance or use of an insured location, even a contract to perform some sort of service, this is not the case. Section II coverage agrees to protect the insured against claims for damages for bodily injury or property damage caused by an “occurrence”, which means an “accident.” Suits alleging failure to perform and seeking compliance are not within that sphere.

 Also, note that written contracts relating directly to the ownership, maintenance, or use of an insured location can transfer liability to the insured after an occurrence and still be covered.

For example, if an insured and the owner of premises rented to an insured have an understanding (but not a formal contract) that the insured will be responsible if someone is injured by a condition on the premises, the understanding can be formalized after the injury without eliminating coverage. Thus the insured has broad premises liability coverage for any insured location. It is important to distinguish between arrangements involving insured locations (for which coverage is not excluded) and those involving other types of premises (to which exclusion E.4. under the exclusions applicable to both coverages E and F applies).

 Because of the exemptions, the contractual liability exclusion applies only to oral contracts and contracts “otherwise excluded” in the policy, e.g., contracts involving any business pursuit or ownership, maintenance, or use of excluded motor vehicles, watercraft or aircraft. Business contracts are not mentioned in the exclusion but are excluded elsewhere—under the business pursuits exclusion.

 A common use of the exception to the contractual liability exclusion is when an insured rents a large hall, perhaps for a family reunion or wedding reception. The insured may be required to sign a “hold harmless” agreement so that if a guest is injured because of a condition of the premises and sues the hall owner, the liability is transferred to the insured.

But be aware that the coverage will not extend to damage done to the hall by other than fire, smoke or explosion (exclusion F.3.). If guests intentionally smash furniture or fixtures, the insured's liability coverage will not respond.

 2. “Property damage” to property owned by an “insured”. This includes costs or expenses incurred by an “insured” or others to repair, replace, enhance, restore or maintain such property to prevent injury to a person or damage to property of others, whether on or away from an “insured location”;

 This is a standard exclusion common to virtually all liability policies. There is no coverage for property damage to property owned by an insured; damage done by any insured to another insured's property is not covered.

 Further, although some liability forms give coverage for intentional bodily injury or property damage resulting from efforts to protect persons or property, the ISO form is not one of them. The “intentional injury” exclusion excepts only “bodily injury,” and the “owned property” exclusion now adds language precluding coverage for any costs incurred by an insured “or others” to repair an insured's property to prevent damage to property of another.

 The case of Aetna Insurance Co. v. Albert Aaron, 685 A.2d 858 (Md. App. Ct. 1996) triggered this change. Albert Aaron purchased a condominium which included a balcony enclosed in glass. Leaks attributed to problems with the enclosure resulted in water damage to the condo below the insured and commonly held areas. The association sued for the money spent (nearly $100,000) to repair the glass enclosure, the condo below, and the common areas. The court held that the costs were covered under Aaron's policy and that the “owned property” exclusion did not preclude coverage for measures taken on the insured's property to prevent damage to property of others.

 3. “Property damage” to property rented to, occupied or used by or in the care of the “insured.” This exclusion does not apply to “property damage” caused by fire, smoke or explosion;

 Analysis

 This exclusion is a standard liability provision, similar to the “care, custody, or control” exclusion of commercial liability policies. (SeeCare, Custody, or Control Exclusion for a discussion of this clause.)  The homeowners forms prior to the homeowners 76 policy included “custody or control” along with “care” in the similar exclusion. However, should an insured inadvertently cause a fire in a hotel room resulting in damage, the damage is covered. Many insurers have developed independently filed endorsements eliminating water damage (apart from waterbed leakage) or various other perils from the exclusion, as well, but ISO has no standard endorsements or provisions in its homeowners rules for broadening the exemption. The most important application of this exclusion is often found under form HO 00 04 05 11, where the entire house or apartment is rented to the insured, and is therefore subject to the exclusion.

 Less important is the application of the exclusion to personal property in the care of the insured. Coverage C (in section I) insures personal property owned or used by the insured, and at the insured's request, property of guests, so damage by an insured peril to such property can often be paid for under coverage C.

 4. “Bodily injury” to any person eligible to receive any benefits voluntarily provided or required to be provided by an “insured” under any:

a. Workers' compensation law;

b. Non-occupational disability law; or

c. Occupational disease law;

 Analysis

 This exclusion applies wherever benefits are required by law to be provided for domestic employees, or have been provided on a voluntary basis.  (See Coverage for Domestic and Agricultural Employees for a discussion of workers compensation coverage for domestic employees.)  The exclusion does not apply to take away the insured's employers liability protection for injured employees where these benefits are not required by law and have not been provided voluntarily.

 5. “Bodily injury” or “property damage” for which an “insured” under this policy:

a. Is also an insured under a nuclear energy liability policy issued by the:

(1) Nuclear Energy Liability Insurance Association;

(2) Mutual Atomic Energy Liability Underwriters;

(3) Nuclear Insurance Association of Canada;

     or any of their successors; or

b. Would be an insured under such a policy but for the exhaustion of its limit of liability; or

This is a standard and mandatory exclusion, serving to limit the insurance industry's collective liability for nuclear occurrences to the liability provided under the nuclear insurance underwriting pools.

 6. “Bodily injury” to you or an “insured” as defined under Definition 5.a. or b.

This exclusion also applies to any claim made or suit brought against you or an “insured” to:

a. Repay; or

b. Share damages with;

another person who may be obligated to pay damages because of “bodily injury” to an “insured”.

This exclusion takes away coverage for liability of one family member for bodily injury to another family member. In states that in whole or part have abrogated the interspousal or intrafamilial immunity doctrine; in other words, wherein children may sue parents, spouses may sue each other, etc., this exclusion leaves a severe gap in coverage. The gap may have an especially adverse effect with respect to claims brought by persons under age twenty-one in the care of the insured or resident relatives—for example, foster children.

 In a 1987 case, Jacqueline Jenks v. State of Louisiana, 507 So. 2d 877 (Louis. App. Ct. 1987), the court upheld this exclusion in the homeowners policy in the case of a wrongful death action by the natural mother against foster parents who had charge of her 15-month-old child. The case of American Family Mutual Insurance Company v. Ryan., 330 N.W.2d 113 (Minn. 1983) involved an insured child injured by a riding lawn mower. The mother sued the lawn mower manufacturer, who in turn sued the mother for negligent supervision. American Family denied coverage citing the exclusion, and the state supreme court upheld the denial.

 The exclusion appears to be in conflict with the severability of insurance clause, section II, condition 2, which provides that the insurance applies separately to each insured. The purpose of this clause is to make the insurance available for any insured in claims by other insureds. But in a number of cases involving a similar clause in independent homeowners and automobile policies, the courts have, for the most part, upheld the exclusion, and the question of conflict with the severability of insurance clause does not appear to have been raised. The courts generally hold that to do otherwise places an unfair burden on the insurer to determine whether there has been collusion between family members. For a review of court cases on the applicability of the exclusion, see Intrafamily or Household Exclusions.

 New in the 2011 form is the addition of an exclusion for claims for the insured to repay or share in damages that another person is obligated to pay for injury or damage to another person or property. For example, the insured is playing catch with a friend and in trying to catch an errant ball the friend injuries another party. That party makes a claim against the friend for injuries, and the friend feels like since the insured threw the errant ball the insured should share in paying for those injuries. There is no coverage for such a situation – while the friend may think the insured shares in the responsibility, that is the opinion of the friend, and does not necessarily make the insured liable in any way to the injured party.

 Coverage F—Medical Payments to Others—Exclusions

 Four exclusions apply to coverage F—medical payments to others, but not to coverage E liability.

G. Coverage F—Medical Payments to Others

     Coverage F does not apply to “bodily injury”:

1. To a “residence employee” if the “bodily injury”:

(1) Occurs off the “insured location”; and

(2) Does not arise out of or in the course of the “residence employee's” employment by an “insured”;

This exclusion limits the medical payments insurance with respect to residence employees (definition 10.) to bodily injury on an insured location (definition 6.) or arising out of or in the course of employment away from an insured location. The homeowners policy was not intended to take the place of health insurance.

 2. To any person eligible to receive benefits voluntarily provided or required to be provided under any:

a. Workers' compensation law;

b. Non-occupational disability law; or

c. Occupational disease law;

 This exclusion is like the similar exclusion applying to liability coverage E, except that it applies to any benefits from any source that the injured person is eligible to receive, not just benefits required to be or voluntarily provided by the insured. The exclusion applies to any injured person, and not simply to the insured's employees.

 3. From any:

a. Nuclear reaction;

b. Nuclear radiation; or

c. Radioactive contamination;

     all whether controlled or uncontrolled or however caused; or

d. Any consequence of any of these; or

 This is the standard nuclear exclusion for medical payments coverage.

 4. To any person, other than a “residence employee” of an “insured,” regularly residing on any part of the “insured location.”

 As to residents regularly residing on an insured location, this exclusion establishes the clear intent to exclude coverage for medical payments to others, unless the resident also qualifies as a residence employee (definition 10.). For example, if the insured owns a piece of rental property shown on the declarations as an “insured location” there is no medical payments coverage under the policy for a tenant of that property. Again, the homeowners policy was not intended to provide health insurance.