WHAT DOES THE LIABILITY SECTION OF
YOUR HOMEOWNER’S POLICY COVER?
Originally Published September 2018
Contrary to common misconceptions, most policies do
not require the accident to happen on the insured property
in order to be covered. Accordingly, under many
policies, if the insured negligently causes bodily injury
or property damage away from the insured property, the
liability for that damage would fall within the general
insuring agreement. However, homeowner’s policies
commonly contain exclusions to the liability coverage
which provide there is no coverage for bodily injury or
property damage arising out of such things as:
• Ownership, maintenance or use of motor vehicles,
watercraft, or aircraft
The Personal Injury Offense coverage typically
• Business pursuits or professional services
excludes injuries arising from:
• Transmission of communicable diseases
• Lead, mold, fungus
• The violation of a criminal law by or with the
• Child molestation
knowledge or consent of any insured.
• Conduct by or at the direction of any insured
• An offense directly or indirectly related to the
intended to cause injury
employment of the injured person by the insured.
• The business pursuits of an insured.
M
ost homeowners obtain a homeowner’s insurance policy to cover
loss or damage to their homes. They know that the property is
covered and they may know that there is some “liability” coverage under
the policy, but that is the extent of their understanding of what the policy
covers. Increasingly, homeowners are obtaining insurance policies on-
line without an agent to advise them on what liability coverage they
have, and what other liability coverages are available. The following
summary explains the liability coverages often provided or available in
a homeowner’s policy.
Liability for Bodily Injury and Property Damage
Caused by an Accident
By: Laura S. Reed, RBE Attorney
The basic liability coverage under a homeowner’s policy states the
insurer will pay amounts that the insured becomes legally obligated to
pay as damages for bodily injury or property damage arising out of an
accident.
Liability for Personal Injury Offenses
Many policies also contain a second type of liability
coverage that even sophisticated insurance consumers
may not realize is available or provided. This is typically
referred to as “Personal Injury Coverage” or “Personal
Injury Offense Coverage.” It covers the insured for
claims against the insured for injuries arising out of
certain enumerated offenses such as:
(1) false arrest, imprisonment, malicious
prosecution and detention;
(2) wrongful eviction, entry, invasion of rights of
privacy;
(3) libel, slander, defamation of character;
(4) discrimination because of race, color, religion
or national origin.
The standard homeowner’s policy contains definitions of bodily injury
and property damage. Bodily injury is usually defined as bodily harm,
sickness or disease. Indiana courts have held that emotional distress that
does not arise from a bodily touching is not “bodily injury” as defined
in many insurance policies. See Indiana Ins. v. Wayne Township Bd.
Of School Comm’rs., 650 N.E.2d 1205 (Ind. Ct. App. 1995). Property
damage is usually defined as physical injury to tangible property.
To be covered under this section, the bodily injury or property damage
must arise out of an accident. The policy may not define the word
accident, but Indiana courts have defined the word accident in a liability
policy as “an unexpected happening or event without an intention or
design.” If bodily injury or property damage was intended by the
insured, then there is no accident and no coverage under this section of
the policy.
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Riley Bennett Egloff LLP - October 2018
Unlike the first type of liability coverage in a
homeowner’s policy for bodily injury and property
damage caused by accidents, Indiana courts have held
that because some of the conduct described in the
Personal Injury Offense coverage includes an element
of intent, coverage is afforded even for intentionally
caused injuries. 1 Indiana courts have also held the claims
that are covered by Personal Injury Offense coverage do
not have to use the exact words or legal theories of the
offenses listed, as long as the complained-of conduct
can be characterized as one of the offenses listed. 2
Defense of Claims
Like an auto policy, the homeowner’s policy also
usually states that the insurance company will defend
the insured by investigating claims made against the
insured and hiring a lawyer to defend the insured in
the event someone files a lawsuit against the insured
making claims within the coverage of the policy.
Conclusion
The liability coverage is an important part of a
homeowner’s insurance policy that provides protection
that a homeowner often does not realize he or she has.
Read your homeowner’s insurance policy to determine
the extent of your liability coverage.
_______________________________________
1
See Davidson v. Cincinnati Ins. Co., 572 N.E.2d 502 (Ind. Ct. App. 1991); Ind. Ins. Co. v. North Vermillion
Cm. Schools, 665 N.E.2d 630 (Ind. Ct. App. 1996).
2
Ind. Ins. Co. v. North Vermillion Cm. Schools, 665 N.E.2d 630 (Ind. Ct. App. 1996).
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