- Alabama Supreme Court Affirms Assault And Battery Exclusion Does Not Apply To Claim for Failure to Implement Risk Management Program
- March 22, 2013 | Author: George B. Hall
- Law Firm: Phelps Dunbar LLP - New Orleans Office
The Alabama Supreme Court has held that a college fraternity’s general liability policy covers damages sustained by an assault victim as a result of the local chapter’s officers’ failure to implement a risk management program. Admiral Ins. Co. v. Price-Williams, 2013 WL 135738 (Ala. Jan. 11, 2013).
A man sustained bodily injuries after a fight at a fraternity house. He filed suit against the national organization, the local chapter and three men who allegedly beat him, two of whom were the president and vice-president of the local chapter. Judgment was rendered in favor of the victim. The court found that the two officers were liable for failing to implement a risk management program required by the national organization. Among other procedures, the program required the fraternity to use “sober monitors” for decision-making responsibilities at parties. The victim commenced a direct action against the fraternity’s liability insurer and the two officers, asserting that the damages awarded in the underlying action were covered under the liability policy. The trial court conducted a bench trial and concluded that the policy provided coverage for the two officers’ liability for failing to implement the risk management program. The insurer appealed.
The insurer argued that coverage for the claims were excluded under the assault and battery exclusion. The Alabama Supreme Court agreed that this exclusion barred coverage of any liability resulting from the conduct of the assault, but held that the exclusion did not apply to the claims arising out of the failure to implement the risk management program, which was required of local officers. The insurer also argued that the failure to implement the risk management program was not an “occurrence” under the policy, but the Supreme Court rejected this argument because the fraternity, as the named insured, expected its local officers to implement the required program. The trial court’s judgment was affirmed.