Liability insurance coverage is complicated. One reason is because there are always at least two legal issues operating independently. On the one side is the liability claim against the insured, with all of its factual and legal issues. On the other side is the policyholder’s claim against the insurance company, with its distinct issues. Sometimes the to are not even governed by the same state’s laws. Yet, they must be brought together to determine the insurer’s duties.
Today’s lesson is about the case of Frankenmuth Mut. Ins. v. Piccard, which involved yet a third distinct legal platform. 440 Mich. 539 (1992). Mr. Piccard was sued for injuries sustained when he burned down his business. He pleaded guilty to arson and admitted that he did it on purpose. He was then sued for “bodily injury” incurred by a bystander. So now we have (1) the intentional arson, (2) the unintended bodily injury, and (3) the insurance coverage issue. So, is there coverage?
The Court directly considered whether unforeseen consequences of an intentional criminal act can be considered an accidental “occurrence.” The Piccard court concluded that the insured could be denied coverage for the property damage arising out of the fire he intentionally ignited. But, the Court found that the bodily injury claims of the injured woman arose out of an “occurrence” and, as such, the insurer had a duty to defend.