Illinois Appellate Court Rules The Meaning of ‘Accident’ in CGL Policy Is Ambiguous
Insurance Law Update
Country Mut. Ins. Co. v. Steve Carr, d/b/a Carr Construction, et al.
Illinois Appellate Court
The Illinois Appellate Court held that a CGL policy covered the insured in a lawsuit because the policy definition of “accident” was unclear.
In Country Mut. Ins. Co. v. Steve Carr, d/b/a Carr Construction, et al., 2007 WL 899486 (Ill. App. 4 Dist. 2007), the insured sought coverage after being sued for negligently placing inappropriate backfill around the plaintiffs’ basement walls and operating heavy earthmoving equipment close to the basement walls, which caused damage to the walls.
The insurer filed a declaratory judgment action, asserting there was no coverage available for the lawsuit because the lawsuit failed to allege an “occurrence” as that term was defined in the insured’s CGL policy. The trial court granted the insurer’s motion for judgment on the pleadings. The insured appealed.
In determining that the lawsuit triggered coverage under the policy, the Illinois Appellate Court focused on the definition of “occurrence.” The policy defined an “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The policy did not define “accident,” and thus the court found the term to be ambiguous.
The court stated that “the real question is whether the person performing the acts leading to the result intended or expected the result. If the person did not intend or expect the result, then the result was the product of an accident.”
Because the lawsuit brought against the insured did not contain allegations that the defendant intended or expected that the walls would be damaged, the court determined that the lawsuit described an “occurrence” as defined by the policy, and that the lawsuit triggered coverage under the insured’s policy.