Coverage for Fatality at Animal Sanctuary Excluded as Business Pursuit
Insurance Law Update
In Safeco Ins. Co. of America v. Hilderbrand, ___ F.3d ___, 2010 WL 1428789 (10th Cir. (Kan.) April 12, 2010), the Tenth Circuit Court of Appeals, applying Kansas law, held that the business pursuits exclusion in a homeowners' policy precluded coverage for a wrongful death lawsuit brought by the estate of a high school student killed by a tiger on the homeowners' property.
Haley Hilderbrand, a 17-year-old high school student, was attacked and killed by a Siberian tiger during her senior picture photo shoot on a Kansas farm owned by the Billingsleys. The Billingsleys ran the Lost Creek Animal Sanctuary, a nonprofit foundation designed to rescue exotic animals, and Animal Entertainment Productions (AEP), a for-profit partnership intended to fund the sanctuary through exhibitions of the rescued animals, including the tiger, at various events.
Haley's estate brought a wrongful death lawsuit against the Billingsleys in Kansas state court. At the time of the accident, the Billingsleys held only a homeowners' insurance policy issued by Safeco Insurance Company of America. Safeco filed a declaratory judgment action in federal court, asserting that it was not required to provide coverage for the wrongful death lawsuit because the incident arose out of the operation of a business, and the Billingsleys' homeowners' policy specifically excluded coverage for claims "arising out of the business pursuits of any insured." The Billingsleys contended that the exclusion did not apply because, inter alia, the Billingsleys' care for the exotic animals was more akin to a hobby than a business, and that they never actually made a profit. After a trial on the merits, the district court found in favor of Safeco.
The Tenth Circuit affirmed. The court noted that application of the business pursuits exclusion turns on whether the insured had a "profit motive" and not whether the insured actually realized a profit. Here, the Billingsleys were operating AEP, a for-profit business, with the intent to make a profit. Thus, the business pursuits exclusion in the Safeco policy applied to bar coverage.