|Post by Bennett Crites|
The CGL policy at issue excluded coverage for bodily injury to an “‘employee’ of the insured arising out of and in the course of … employment by the insured.” The only dispute here was whether Thorne’s injuries arose out of his employment. In considering the cross motions for summary judgment, the judge noted that South Carolina courts have interpreted the term “arising out of” when used in an insurance policy exclusion, to be narrowly construed to mean “caused by.”
Viewing the evidence in the light most favorable to the insurer, Judge David Norton could not find that the alleged assault was “caused by” and “arose out of” the employment of Thorne. Rather, the evidence showed that the incident was caused by a personal dispute. Therefore, the employer’s liability exclusion does not apply, and therefore Penn National was not relieved of its duty to defend and indemnify the employer.
Only time will tell how this case will affect other CGL policies as this is a fact-specific inquiry. To defend or not to defend in this matter? It appears we have an answer, unless the Fourth Circuit says otherwise.