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Liability Coverage Exclusions in Insurance Contracts

Insurance policies containing an exclusionary clause for intentional acts are effective to preclude indemnification against "intentional or expected" behavior by an insured, including self-defense, as a matter of law.

In a 1995 Michigan Court of Appeals case, Auto-Owners v. Harrington, Harrington shot and killed the decedent in an incident that was ruled self-defense. The decedent's father filed a wrongful death action against Harrington. At his deposition, Harrington testified that he intended to shoot the decedent. Harrington's homeowner's insurance provider brought a declaratory action to determine its duty to defend and to provide insurance coverage under a homeowner's policy. The policy at issue had a provision which stated that personal liability coverage was excluded when bodily injury to others was expected or intended by an insured person. The trial court held that the plaintiff was obligated to defend and indemnify the defendants under the homeowners' insurance policy.

In 1995, the Michigan Court of Appeals reversed and held that, even if Harrington acted in self-defense, his action was still intentional and expected as a matter of law and, therefore, the exclusion under the insurance policy precluded coverage.

As an issue of first impression, the court looked to the wording of the exclusionary clause to determine its applicability. The clause read: "Under Personal Liability Coverage and Medical Payments to Others Coverage, we do not cover... (7) bodily injury or property damage expected or intended by an insured person."

The court analyzed the insurance policy exclusion clause, specifically the "expected or intended" language, in light of the stated intent of Harrington.

It is well-established in Michigan that, although exclusionary clauses are to be strictly construed in favor of the insured, an insurance company should not be forced to be liable for risks it did not assume. Therefore, in Harrington, the plaintiff had to show that Harrington intended and expected injury to result from his intentional act of shooting the decedent. In light of the facts, especially those as stated in Harrington's deposition, the court held that James Harrington did intend to shoot and harm the decedent. Therefore, the exclusion applied.

The court next held that an injury resulting from an act committed by the insured in self-defense is an expected or intended act under an insurance policy as a matter of law. Although several states hold to the contrary, the Harrington court disagreed for three primary reason. First, the Michigan Supreme Court had previously construed similar language in insurance policies to mean that the insured was aware of the harm which was likely to result from the act. Second, while public policy supports injured parties receiving compensation for injury, the individuals who inflict the injuries should not be indemnified for their actions. Third, other decisions hold that self-defense does not provide an exception to the intentional acts exclusion.

In light of these factors and the unequivocal statement of subjective intent to injure by Harrington, his act was intentional and the injury expected. The court stated that, where the injury was intentional and expected, the insurer is under no duty to defend and indemnify.

Michigan does not follow the national trend, which holds that, as a matter of law, an act committed in self-defense is neither intended nor expected. For example, the Nebraska Supreme Court has stated that a person acting in self-defense is not generally acting for the purpose of intending to injure another but to protect himself. This view is also followed in California, New York and Arizona.

Pursuant to the majority viewpoint, an insurance company is obligated to defend and provide coverage to defendants in these circumstances.

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