Westfield Ins. Co. v. Vandenburg – Insurance Exclusions for Injury

Many personal injury cases involve efforts to collect damages from the insurance companies that provide coverage for accidental injury and negligence.
For example, an auto insurance policy may expressly indicate it will not cover punitive damages for an insured’s wrongful acts. It may bar coverage from certain high-risk drivers in the home of the insured (sometimes called a “named driver exclusion”).

The problem is, insurance companies have woven into these policies a host of exclusions, or situations for which the company will not provide coverage. Some of these are understandable. But insurance companies will often stretch the facts of the case in an attempt to meet the criteria of the exclusion, even when the claim is in fact legitimate.

The case of Westfield Ins. Co. v. Vandenberg, recently before the U.S. Court of Appeals for the Seventh Circuit, involves a tragic accident that resulted in a man becoming paralyzed from the chest down. It also involves a number of defendants and insurance companies.

While defendants all settled out-of-court on the personal injury lawsuit for a total of $25 million, one of those insurance companies separately sought a declaratory judgment, asserting the accident was barred from payout by its listed exclusions.

Trial court agreed and, ultimately, so did the federal appeals court.

According to court records, plaintiff was attending a five-hour, chartered cruise on Lake Michigan when a bench on which he was sitting tipped over. The bench wasn’t anchored to the deck, and there was no railing on that upper deck. Injuries sustained in that fall left plaintiff paralyzed.

The yacht was owned by a closely-held corporation owned by three individuals. One of those ran a paving company that plaintiff asserted was responsible for booking and marketing the yacht charter.

At the time of the accident, that company was insured by a commercial general liability policy, as well as under a commercial general liability policy. The application of those policies extended to the paving company, as well as an investment firm owned by the same man.

Neither company asserted ownership or maintenance of the watercraft in question. On the exclusions portion of the policy, it indicated coverage would be excluded for ownership, use, maintenance or entrustment of a watercraft owned, operated or rented to any insured if it was not specifically listed on the policy – and this one was not.

After the accident, the defendants agreed to pay $25 million collectively, which was to be paid solely through an assignment of recovery rights to their insurance policies.

But Westfield asserted it should not have to pay because the accident fell under the policy’s exclusions.

The trial court agreed, and further so did the federal appeals court. Plaintiff had argued that because the liability policies don’t expressly exclude coverage of non-construction-related injuries, that coverage should be provided.

However, the courts analyzed the intention of both the insured and insurer, and found it was clear the policies were intended only to provide coverage to insured’s construction-related business.

This does not mean plaintiff will not receive anything. He will still be able to collect from the other defendant’s insurers, assuming they also do not file for declaratory judgments.

Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:
Westfield Ins. Co. v. Vandenberg, Aug. 6, 2015, U.S. Court of Appeal for the Seventh Circuit

More Blog Entries:
Wright v. PRG Real Estate Mgt. Inc. – South Carolina Premises Liability Lawsuit, Aug. 6, 2015, Charlotte Personal Injury Attorney Blog

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