Section I Perils Insured Against

Section I Exclusions

Section I Conditions

Section II Liability Coverages

Section II Exclusions

Section II Additional Coverages

Section II Conditions, Sections I and II Conditions

SECTION II – LIABILITY COVERAGES

A. Coverage E – Personal Liability

If a claim is made or a suit is brought against an "insured" for damages because of "bodily injury" or "property damage" caused by an "occurrence" to which this coverage applies, we will:

1. Pay up to our limit of liability for the damages for which an "insured" is legally liable. Damages include prejudgment interest awarded against an "insured"; and

2. Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent. We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when our limit of liability for the "occurrence" has been exhausted by payment of a judgment or settlement.

B. Coverage F – Medical Payments To Others

We will pay the necessary medical expenses that are incurred or medically ascertained within three years from the date of an accident causing "bodily injury". Medical expenses means reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic devices and funeral services. This coverage does not apply to you or regular residents of your household except "residence employees". As to others, this coverage applies only:

1. To a person on the "insured location" with the permission of an "insured"; or 2. To a person off the "insured location", if the "bodily injury":

a. Arises out of a condition on the "insured location" or the ways immediately adjoining; b. Is caused by the activities of an "insured"; c. Is caused by a "residence employee" in the course of the "residence employee's" employment by an "insured"; or d. Is caused by an animal owned by or in the care of an "insured".

Analysis

This first part of Section II outlines the two sections of coverage, Personal Liability and Medical Payments. Under personal liability, a key term is "occurrence". "Occurrence" is defined as an accident, and includes continuous or repeated exposure to substantially the same general harmful conditions which results in "bodily injury" or "property damage" during the policy period. If a claim is made or a suit is brought against the insured the policy promises to pay for damages for which an insured is legally liable. This would include prejudgment interest awarded against an insured. Also, the insurer will provide a defense for the insured with counsel of the insurer's choice, even if the suit is groundless, false or fraudulent. Insurers have a great deal of experience, and are well-suited to handle such cases. The insurer's duty to settle or defend ends when the limit of liability has been exhausted by payment of a judgment or settlement.

It's important to note that while coverage applies to accidents that cause injury or property damage, the policy promises coverage for a legal defense and payment when the insured is legally liable. The question then becomes whether or not the insured is legally liable. As the terms are not defined, courts would turn to a standard desk reference. Merriam-Webster defines legally as: : in a legal manner : in accordance with the law and liable as a: obligated according to law or equity : RESPONSIBLE. If an insured fails to maintain the railings on the stairs and someone falls and is injured, the insured could be considered legally liable since it is his responsibility to maintain his property.

But what about things beyond the insured's control and for which there is no legal liability? Many of those losses would fall under Damage to Property of Others, one of the Additional Coverages available in Section II.

Coverage is also provided for necessary medical expenses that are incurred within three years from the date of an accident that results in "bodily injury". Medical expenses are defined to include reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic devices and funeral expenses. This coverage is available to visitors and guests, and does not apply to you or regular residents of the household except for "residence employees". In order for this coverage to apply, the person must be on the "insured location" with permission of an "insured"; someone trespassing on the property without permission would not receive this coverage. Coverage is available if the injury arises out of a condition on the "insured location" or the ways immediately joining the location. If an insured's tree root by the walkway is raised out of the ground and a pedestrian trips, falls, and is injured, there would be coverage for that person's injuries.

If an accident occurs off the "insured location", coverage would apply to "bodily injury" if that injury arises out of certain situations. The first would be if the injury arises out of activities of an insured. For example, an insured is riding his bicycle and runs into a pedestrian, there would be coverage for the pedestrian's injuries. If the injury is caused by a "residence employee" in the course of that person's employment for the insured, that injury would be covered. Lastly, if an injury is caused by an animal owned by or in the care of an "insured", there would be coverage for any injuries caused by the animal, whether it's the insured's pet or a pet the insured happens to be sitting for a friend or relative.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.