Policyholders are often surprised to hear that their policies cover more than the requirement for operational requirements. For example, a general responsibility policy may include a cyber-related loss. See our previous post. As a later example, a federal court in South Carolina found that a parent homeowner policy pledged an insurer to defend a college student against hazing claims. Allstate Ins. Co. v. Ingraham No. 7: 15-cv-3212 (DSC March 14, 2017).
That case involved a dispute over coverage for a lawsuit claiming that the policyholders' children were involved in hazing freshman swimmers at the University of Virginia men swimming the team. The student sought coverage under the homeowners' policy Allstate had issued to his parents. Allstate indicted and tried to decide on coverage according to the policy.
Allstate claimed that it had no obligation to defend, as the charges against the student arose from "intentional hazing" so that there was no "accident" under the policy. The court rejected that argument and found Allstate characterization of the underlying claims and applicable law too narrow. The underlying claims were not based solely on intentional behavior, and in any case, intentional behavior that caused an accidental injury constituted an "accident" under the policy. For similar reasons, the Court did not accept Allstate's position that the deliberate acts exclusively released Allstate from its duty of defense.