A federal district court in Georgia ruled that a firearms exclusion in a commercial general liability policy was ambiguous and did not bar coverage of a wrongful death suit against the insured. The case is Hudson Specialty Ins. Co. v. Snappy Slappy LLC, No. 5:18-cv-00104-TES, 2018 U.S. Dist. LEXIS 148429 (M.D. Ga. Aug. 30, 2018) '

 

In March 2016, Hudson Specialty Insurance Company (Hudson) issued a commercial general liability policy to Snappy Slappy, LLC (Snappy) providing coverage from March 20, 2016 to March 30, 2017. The policy stated the general bodily injury, and occurrence provisions, and provided that the policy did not apply to "bodily injury. . . arising out of the manufacture, importation, sales, distribution, gunsmithing, ownership, maintenance or use of firearms or weapons."

 

Carol Slocumb filed a wrongful death action against Snappy Slappy, doing business as Jus One More, a sports bar in Warner Robins, Georgia, alleging that her son had been shot and killed by a fellow business invitee at Jus One More. Slocumb argued that Jus One More was negligent in their security practices which were the proximate cause of her son's death. She sought damages relating to pain and suffering, burial expenses, and the value of her son's life.

 

Jus One More notified their insurer, Hudson, about the suit. Hudson responded stating that the policy barred coverage on the lawsuit based on, among other things, the firearm exclusion mentioned above. Jus One More disputed the interpretation of the policy. Hudson filed an action seeking declaratory judgment that it was not obligated to defend or indemnify Jus One More against Slocumb's suit due to the use of a firearm in the incident. Hudson moved for a judgment on the pleadings contending that losses associated with the use of a firearm were not covered under the applicable policy.

 

The district court denied the motion and rejected the insurer's interpretation of the firearms exclusion, finding that the exclusion was not "clear and unambiguous" because it did not limit or specify to whom it applied. In explanation, the district court said that the exclusion could be interpreted to mean that only the insured's use of firearms was included, while under an "equally reasonable interpretation" it could be read to deny coverage for "bodily injury" resulting from any use of firearms including use of firearms by a third party.

 

Because the court found that the exclusion was ambiguous, the court concluded that it had to be construed against Hudson and in favor of coverage for Jus One More, and thus the exclusion did not bar coverage.

 

Editor's Note:

A term in an insurance contract is found to be ambiguous when it is reasonably subject to more than one interpretation. Sometimes a term can be unclear as to what the parties intended from the outset. Legally, ambiguous insurance policy terms are to be construed against the drafter. This is because the drafter, in this case the insurer, is in a superior bargaining position due to the nature of an insurance contract. An insurer does more insurance business, and since they are the entity who drafts the contracts they are in a superior bargaining position. In this case the court provided an example of how firearms as defined in the policy could be interpreted in more than one way, clearly showing that the term and definition was ambiguous.