Assault & Battery: Where’s the Coverage?

Assault & Battery: Where’s the Coverage?

Most insurance agents would not expect to see an assault and battery exclusion on their client’s CGL policy. However, when it comes to establishments that serve a high percentage of alcohol, it is not uncommon for carriers to apply a specialized exclusion for this exposure.

Do you know if your client is properly covered? 

Even though they may be receiving some form or limit of assault and battery coverage on their liquor liability policy, this doesn’t necessarily mean they have coverage on their CGL, especially if that coverage is written through another company. These common exclusions could lead to aggravation and even worse, denial of coverage in the event of a claim.

Let’s apply this to a real scenario.

The latter occurred several years ago when an establishment purchased two separate policies from an independent agent to cover both their general liability and liquor liability exposures. The incident involved a patron who died from injuries he sustained after being pushed off the front step of a bar by another patron and hitting his head on the pavement. The estate of the deceased patron filed a wrongful death lawsuit naming both the attacker and the insured as defendants.

Shortly after receiving the suit papers, the insured learned of an assault and battery exclusion on their CGL policy. They also received a denial from their liquor liability carrier. The denial cited that the matter should have been picked up by the CGL. A subsequent suit was later filed by the bar against the agent claiming that they failed to provide insurance coverage that would have protected it from claims resulting from the incident.

So the big question is, could this have been avoided?

This nightmare scenario may have been avoided if the agent had found suitable coverage for these exposures through a carrier willing to insure them properly. Most surplus lines carriers will offer an attractive price but will carve out the most important coverage that your client needs through various exclusions and/or restrictive endorsements.

So what are you really paying for with a non-admitted “surplus lines” carrier? If you are fortunate enough to receive a sublimit on these coverages, then the defense costs will more than likely be within those limits. This means that if the loss is severe enough, it is possible that those policy limits could be exhausted on defense costs alone! The competitive pricing that gave you the edge at the point of sale will quickly be overshadowed by an uncovered claim and your client will be looking to you for answers.

What would happen if a fight broke out at your client’s establishment and your security staff failed to de-escalate the situation properly? Would there be coverage? What if an employee became too physical while escorting a patron off the premises? How would your policy/policies respond? These are some of the key questions that need to be answered when securing coverage.

You can prevent this from happening to you.

When reviewing coverage with your clients, make sure that they are receiving the protection that they need. Roughly two-thirds of our claims involve an assault and battery incident on premises where the over-serving of alcohol may or may not have been alleged. This is why it is extremely important to make sure both liquor-related as well as non-liquor-related assault and battery coverage is being provided.

Don’t wait until after a loss has occurred to determine if your client has the coverage they need. At HIG, we pride ourselves on educating agents on the hazards associated within the bar and restaurant industry. Call us today to find out how we can help you provide your clients with the most comprehensive risk transfer solutions they need to mitigate future losses and give them the peace of mind to focus on what truly matters, the customer.

Frank O’Malley is a Sr. Commercial Underwriter at Hospitality Insurance Group.

 

Please be advised that the opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute a legal opinion.