By: Jessica Samford
As “March Madness” comes to an end, many are gearing up for “America’s [original] Pastime”—baseball. The baseball stadiums themselves need to be ready for the new season and fans, and the iconic Wrigley Field has been undergoing some major construction during its offseason and is in in the middle of a four-year, four-phase plan known as the “1060 Project” to expand and preserve the home of the Chicago Cubs. Just weeks before the ballpark is to hold its first game of the season, it was reported that a subcontractor, a woman in her mid-thirties, was injured in an “accident” when metal piping fell on her while she was working on the basement level of the stadium.
In the insurance world, “accident” is a term that is often used in insurance policies but rarely defined in the policies themselves. Typically, insurance policies have their own definition section to define certain terms—“bodily injury,” for example—so how is the meaning of “accident” determined if it is not defined? This brings us to our next installment of the FMG insurance law blog’s glossary of key insurance concepts. The first two installments discussed the concepts of “fortuity” and “stop-loss” in insurance policies, and today we will address how “accident” is interpreted in triggering coverage in some insurance policies and states.
A standard commercial general liability insurance policy provides coverage for certain occurrences, where “occurrence” is defined as an “accident” including continuous or repeated exposure to substantially the same general harmful conditions and where “accident” is left undefined. Surprisingly, courts in most states—including Illinois, South Carolina, Georgia, and Florida—simply use dictionary definitions because the state’s contract law provides that terms, even if undefined in the policy, should be given their plain and ordinary meaning. Merriam-Webster’s Dictionary defines “accident” as “an unforeseen and unplanned event or circumstance.” Other dictionary definitions of “accident” include “an unexpected happening without intent or design” and “an event or change occurring without intent or volition through carelessness, unawareness, ignorance, or a combination of causes and producing a unfortunate result.”
All these definitions emphasize the unintentional nature of the event, and as a result, many courts find that assault, battery, unfair business practices, embezzlement, fraud, and other intentional harms are inconsistent with the meaning of “accident.” For example, in Missouri, breach of contract may not fall within the term “accident” especially in a construction context because the performance of the contract is usually within a contractor’s control and a failure to perform in accordance with the contract cannot be described as an undesigned or unexpected event according to the courts. In Georgia, however, even though construction work was done intentionally, the courts have found that faulty workmanship can be considered an “accident” giving rise to coverage when the construction work later causes unforeseen or unexpected damage.
The term “accident” also brings to mind auto accidents where there is usually no issue as to whether an auto accident was unintentional, save for an instance of road rage perhaps. In typical auto liability policies, however, “accident” is included in the definitions section and is often defined as including continuous or repeated exposure to the same conditions resulting in “bodily injury” or “property damage” from the ownership, maintenance or use of a covered “auto.”
Going back to the “accident” reported at Wrigley Field, whether insurance coverage would be triggered is less clear without additional information as to the circumstances surrounding the falling pipes. Were these pipes already installed and did they fall due to negligent construction? Were these pipes to be installed during current construction and did they fall unintentionally? The answers to these questions could result in a court finding broader coverage than the insurance carrier may have intended. Undefined terms in an insurance policy allow for flexibility in interpretation when courts apply plain meanings derived from dictionary definitions and consequently allow for more uncertainty. Insurance carriers should be wary of striking the right balance when crafting the terms of insurance policies to insure certain risks in certain states.