Situations can arise whereby an insurance policy holder is accused of abuse. But policies that stipulate there is no insurance coverage for abuse can still be subject to challenges—and where a child is involved, the stakes are high. The following case was heard in the Wisconsin appeals court that tested the clarity of the abuse exclusion in a home insurance policy.
An infant girl was injured while in care at her babysitter’s home. During the hours of care, the babysitter had stepped outside the home, leaving the child in her crib, inside the house. Also in the home was the babysitter’s then thirteen-year-old son. In an attempt to quiet the baby’s crying, the babysitter’s son pushed the baby’s head down in her crib and threw a toy at her which resulted in injury.
The babysitter held a homeowner insurance policy. The family of the injured baby filed an action seeking compensation from the babysitter for the injury sustained by their child. The insurer moved for summary judgment, arguing that exclusions for abuse, business pursuits, and intentional harm in their client’s insurance policy, barred coverage.
The Language of Abuse
The Court of Appeal addressed the language of the policy to apply the universal rule of insurance interpretation, which is to give language a common and ordinary meaning, understood by a reasonable person. The policy provision at issue was found under “Exclusions – Section II” of this particular policy that stated: Coverage D – Personal Liability and Coverage E – Medical Expense do not apply to:
1. Abuse. We will not cover bodily injury or property damage arising out of or resulting from any actual or alleged: a. sexual molestation or contact; b. corporal punishment; or, c. physical or mental abuse of a person.
The Plaintiffs (the parents of the injured child) argued that the exclusion provision did not apply in their case, because the term “abuse,” as used in this section of the policy, was ambiguous, correctly pointing out that the meaning of the word “abuse” may differ slightly in different contexts. They argued that in some contexts abuse can mean overuse of something, or a course of conduct, such as “alcohol abuse” or “abuse of authority”. The Plaintiffs asserted that abuse can be interpreted to include a wide range of intentional and unintentional acts and, that because the insurance policy had a separate exclusion for intentional injury, the meaning of the abuse exclusion was not clear, and therefore, the insurance policy was unclear.
Abuse is not ambiguous in the policy
The various interpretations of abuse however, do not in fact render the term ambiguous in the particular context of this insurance policy. In a previous deposition the 13-year-old son stated that he understood that throwing something at the baby would probably hurt the baby, or at least cause her pain—in other words he intended to cause intentional harm. The intentional injury exclusion prevents coverage for injury “caused intentionally by or at the direction of any insured, ”even if the actual injury was “different than that which was expected or intended.”
Wisconsin Court of Appeal
The Court of Appeal concluded that the policy at issue was that the term “abuse” is unambiguous.
While there may be certain injuries caused by acts that would qualify as both abuse and as intentional injury, that fact does not create ambiguity. Throwing a toy at a baby’s face, which the babysitter’s son stated was intended to cause pain or injury to the baby (and subsequently had caused injury) constituted abuse in the common and ordinary meaning of the word.
Further, since the physical abuse caused by the child’s babysitter fits within the abuse exception, the Court of Appeal also concluded that the exception precluded insurance coverage for abuse for the babysitter’s alleged failure to control or supervise her son. The fact that a separate exclusion within the policy prevents coverage for intentional harm does not render the abuse exclusion ambiguous, but rather, helped to provide context to the abuse exclusion.
The trial court found that the injury sustained by the Plaintiff’s child was bodily injury arising from physical abuse. As it happens, the baby’s mother testified that her daughter had bruises on her face when she picked her up from the babysitter’s home on the day of the incident. The Court of Appeal agreed with the trial court that the record supported the earlier court’s finding that the babysitter had caused bodily injury to the Plaintiff’s baby.
Consequently, the Wisconsin Court of Appeal resolved the insurance coverage dispute by finding the use of the word “abuse” unambiguous, and therefore not an exclusion.
By definition, insurance only applies to fortuitous events. Intentionally throwing a toy at an infant with knowledge that the infant would be injured is not fortuitous, contingent, or an unknown event. Rather, it is an intentional act of abuse by a child against another child. The policy clearly and unambiguously excluded insurance coverage for abuse.
Even if the court determined that there was evidence of abuse, it was not required to go further. Since the 13-year-old child was a resident in the babysitter’s household, and because he admitted that he intentionally caused injury to the infant, the court could have rejected the claim for defense on that basis, as well as on the ground that the injury resulted from a business pursuit of the hired babysitter.
Insurance protects the insured against many risks of loss but not all. In this case, to allow such wrongful and abusive conduct by the insured babysitter to be indemnified by an insurance policy (which did not agree to cover such acts), would change insurance from a contract of indemnity, to a form of a gratuity.
Susan A. Hansen, Kurt v. Christa Thorin and American Family Mutual Insurance, No. 2011AP997 (Wis.App. 05/16/2012) the Wisconsin Court of Appeal
Barry Zalma, Esq., CFE, has practiced law in California for more than 40 years as an insurance coverage and claims handling lawyer. He also serves as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud. Mr. Zalma serves as a consultant and expert, almost equally, for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and is the author of Insurance Claims: A Comprehensive Guide, Mold: A Comprehensive Claims Guide, and Construction Defects: Litigation and Claims.
Barry Zalma can be reached at any time at 310-390-4455 or by e-mail at email@example.com.