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January 7, 2016  

 
 Q&A of the Week
Definition of "Occurrence"

A Massachusetts subscriber recently asked the following question:

What is the broadest definition of "occurrence"? Where can I look for other definitions?

ANSWER: "Occurrence" is not defined in the ISO Building and Personal Property Coverage Form. So, we look to the ordinary, plain usage of the word for its definition, such as the court did in Western & Clay, LLC v. Landmark American Ins. Co., No. C09–1423 MJP, 2010 WL 4855879 (W.D. Wash. Nov. 22, 2010).

The court stated that the word "occurrence" is not defined in the policies. Therefore, the court chose to analyze the plain, ordinary, and popular meaning by consulting the dictionary. An occurrence is defined in the dictionary as something that takes place or comes about, and the court found this to be synonymous with an event or incident. Any temporal limitation can only be determined with regard to the specific occurrence and context of that occurrence.

That is a pretty broad definition. As the court noted, whether an event constitutes more than one occurrence is based on the specific facts of the event. Case law would be a good place to look for how courts have interpreted the term and to find those definitions.
 
 
 Litigation Watch
Cooperation Requirement

The insured filed a lawsuit against the insurer seeking a declaration that the insurer was obligated to pay monetary compensation to his then-girlfriend, now-wife, for injuries she incurred when she fell at his workplace. This case is Chandler v. Concord Group Insurance Company, 2015 WL 6395320.

Chandler's girlfriend visited his place of business in May 2009 and tripped on the steps. The insurer was not notified of this incident until February 2010, and requested that Chandler sign a nonwaiver agreement so it could investigate. Chandler refused to sign the agreement and determined that Concord's desire to investigate the claim was in effect a wrongful denial of coverage. In March of 2010, Chandler filed a lawsuit, alleging that Concord had refused to pay the claim. The trial court ruled that Chandler had breached his duty to cooperate with the insurer and granted summary judgment to the insurer. This appeal followed.

The Supreme Court of Vermont noted that the facts showed that Chandler had actively prevented Concord from investigating the incident by not reporting the claim for several months, by not allowing investigators access to the premises, and by interfering with discovery and depositions. The court also noted that Chandler had violated his duty to not undertake obligations without the insurer's consent by settling the claim against him.

In this instance, there was no dispute that within three weeks of Concord's first contacting Chandler, before allowing Concord to interview him or investigate at the accident site, and before allowing sufficient time for Concord to get the necessary medical records and other information to support the claim, Chandler filed a lawsuit against Concord. He did so after insisting that Concord pay without investigation, declining to participate in an interview or allow an investigator to visit the site of the accident, and indicating that if Concord did not settle the case right away, he would settle himself. Moreover, Chandler did not dispute the fact that he entered into a stipulation on the merits of the personal injury claim and subjected himself to liability in connection with the claim in the amount of $1,311,500.

On the basis of these facts, the Supreme Court concluded that Chandler forfeited his coverage under the Concord policy by failing to comply with the cooperation requirement. Also, Chandler's admission of liability and stipulation to a judgment for damages amounts to noncooperation under the terms of the policy.

The ruling of the trial court was affirmed.

Editor's Note: The cooperation clause in an insurance policy protects the insurer by obligating the insured not to intentionally and deliberately take any action that would substantially affect adversely the insurer's defense, settlement, or other handling of the claim. In this instance, the insured violated his duty of cooperation and in fact, acted in a manner meant to impede any investigation of the claim. Thus, his breach of the cooperation requirement meant the insurer was relieved of its obligations to defend and indemnify.
 
 Fraud of the Week
Personal Property Claim—Washington
AMOUNT $2,500.00


An insured filed a claim that her vehicle was broken into and $25,000 worth of property, including her purse, wedding ring, other jewelry, and a woman's Rolex watch were stolen. The carrier found that another carrier had paid out nearly $40,000 for a similar claim in 2005 that included a Rolex with the same serial number. She withdrew the current claim, stating she had found the items in a gym bag at home. She was charged with one count of false insurance claims in excess of $1,500 and one count of first-degree attempted theft. She entered a diversion program in exchange for dismissal of the charges.
 
   
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