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HO Gun Liability Coverage

Author: Bill Wilson
 
Note: The original version of this article was first published by IA Magazine in April 2013.
 
One of your insureds has bought a hand gun, taken a gun safety course and obtained a concealed weapon permit. She wants to know how her homeowners and umbrella policies would respond if she used the weapon in self-defense to protect herself, her family or their possessions from an assailant.
 
Several other insureds, having seen the discussions on TV news programs about proposed state and national legislation to require “gun insurance,” have contacted the agency to ask about what they might need to do. How do you advise them?
 
Using current ISO homeowners policies as an industry coverage standard, the most likely candidate for a claim denial is the “intentional loss” exclusion:
 
1.       Expected Or Intended Injury
 
“Bodily injury” or “property damage” which is expected or intended by an “insured” even if the resulting “bodily injury” or “property damage”:
 
a.        Is of a different kind, quality or degree than initially expected or intended; or
 
b.       Is sustained by a different person, entity, real or personal property, than initially expected or intended.
 
However, this Exclusion E.1. does not apply to “bodily injury” resulting from the use of reasonable force by an “insured” to protect persons or property;
 
What constitutes “reasonable” force? That can’t be answered until the occurrence takes place and the facts are known, so it’s impossible to say absolutely whether the policy would respond to a claim where a gun was used in self-defense.
 
Since facts are ultimately decided by juries in the case of litigation that goes to trial, it’s likely the insurer would be obligated under this language to tender a defense. However, what may or may not be covered will depend on the unique facts and circumstances of each case, so all you can do is point to this policy provision with the caveat that other exclusions might be triggered as well.
 
If the “self-defense” exception above isn’t included in the “intentional loss” exclusion in the subject policy—and it’s often not in older ISO or proprietary company forms—then it probably doesn’t matter whether it’s in self-defense. If you shoot someone deliberately, for whatever reason, that’s an intentional loss and likely excluded under such policies.
 
A possible exception to that could be if there was no intent or expectation of serious injury or death—but even that would be a real stretch. Keep in mind that this entire discussion is really not new. For decades, many business owners have kept the proverbial sawed-off shotgun under the counter. Like ISO’s HO policy, their CGL policy has a virtually identical exclusion and exception that has been discussed for years by commercial lines practitioners.
 
As for umbrella or excess policies, it all depends on the precise language of the form, which can vary dramatically from one insurer to another.
 
And be wary of any standalone “gun liability” policies. Many of them may be so restrictive that very little coverage is actually provided.
 
 
April 2014 Update
“Beware Non-ISO Policy Forms!”
 
We just received this “Ask an Expert” question the demonstrates, among other things, that personal lines policies are not commodities and that you MUST know the products you’re selling to be able to answer questions from your customers:
 
 Question
 “The state of Illinois has recently approved concealed carry laws relating to firearms. I have had several questions from my insureds as to whether or not the home policy provides liability coverage for a shooting. I am advised by my underwriter that there would be no liability coverage under the HO3 policy and she refers to exclusion E.1 Expected or Intended Injury. Could you please address this question for me? Attached is the ISO home policy.”
 
Answer
 
The form you attached is not an ISO policy. It doesn’t have any kind of ISO copyright notice and the edition date is wrong. This insurer’s HO form says this:
 
1.       Expected Or Intended Injury
 
“Bodily injury” or “property damage” which is expected or intended by an “insured” even if the resulting “bodily injury” or “property damage”:
 
a.        Is of a different kind, quality or degree than initially expected or intended; or
 
b.       Is sustained by a different person, entity, real or personal property, than initially expected or intended.
 
Compare this language to the ISO form language quoted above. See what’s missing? The language in this carrier’s exclusion is IDENTICAL to ISO’s other than the critical fact that they have omitted the exception language.
 
This is a good example of why insurance is not a commodity. If you own firearms for self-defense, whether you have this policy or the ISO form can make a big difference in a multi-million dollar wrongful death suit.
 
 
Note:  For an article about coverage under the ISO CGL policy, click here.
 
Last Updated: August 3, 2015
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​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556
email: info@iiaba.net

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