Liability insurer must defend suit for parking lot killing

In Virginia, a general liability insurer's obligation to defend an action is shaped by a comparison of the insurance policy's terms and the claims made against the insured.

Case name: Admiral Insurance Co. v. G4S Youth Services, No. 3:07-CV-656 (E.D. Va. 06/09/09).

Ruling: The U.S. District Court, Eastern District of Virginia granted summary judgment to an employer in an insurance coverage dispute with its general liability insurer. It ruled the insurer had a duty to defend the employer in a premises liability suit filed by the family of an employee who was killed by her boyfriend in the employer's parking lot.

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What it means: In Virginia, a general liability insurer's obligation to defend an action is shaped by a comparison of the insurance policy's terms and the claims made against the insured.

Summary: The employer was sued by the family of an employee who was shot to death in the parking lot by her former boyfriend. The suit alleged the employer was negligent in providing security at its premises. The employer's general liability insurer asked a federal judge to find that it did not have to defend the employer in the premises liability suit. The judge refused, ruling that the family's negligent security claim was not excluded from coverage under the liability policy. Therefore, the insurer had a duty to defend the suit on behalf of the employer.

The insurer argued that the policy excluded coverage of the family's suit because it did not cover claims that arose when the employee was working in the course and scope of her employment. The District Court rejected the insurer's argument, determining that the premises liability claim was not based on an employer-employee relationship as alleged.It explained that when determining whether the incident was covered under the insurance policy, the court had to review the insurance policy itself, the facts surrounding the employee's death, and the family's allegations in the lawsuit. The court reasoned the employee was not engaged in her job when the accident occurred, because although she was on the employer's premises when she was shot, she had not yet started working, had not entered the building, and had not signed on for the day.

The court further explained that the family's lawsuit alleged that the employer was contractually responsible for providing security on its premises. The court pointed out that because the premises liability claim was expressed in the family's complaint, the duty to defend attached to the insurer. Further, because this duty did not arise out of the employment relationship, the insurer had a duty to defend the suit.

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July 16, 2009

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