INSURANCE LAW – Supreme Court finds lower courts erred in construing business pursuits exclusion in homeowners’ and umbrella policies:

1/10/2018 | Joseph M. Busher Jr.

Category: Insurance

Joseph M. Busher Jr.

In this declaratory judgment action, the liability insurers sought a declaration that it did not owe a duty to defend and indemnify the insured under homeowners and personal umbrella policies where the insured’s employee brought a false imprisonment action against the insured. The false imprisonment action arose out of an incident where the insured kept the employee in his house and did not allow her to call the police in response to a masked intruder entering the insured’s home while the employee was working in the insured’s home office.  The insurer argued that it had no duty to indemnify the jury’s verdict in favor of the insured because the suit was excluded under the business pursuits exclusion of the policy.  The trial court held for the insured, but the Appellate Court reversed.  The insured appealed the Appellate Court’s decision and the Supreme Court held that neither court had correctly interpreted the scope of the business pursuit exclusion.  It remanded the case to the trial court and stated that the proper factual inquiry was to look at factors including whether the insured’s false imprisonment of the employee was connected with, had its origins from, grew out of, flowed from, or was incident to the insured’s business purists, the place of injury, and the purpose of the activity.  Nationwide Mutual Ins. Co. v. Pasiak, 327 Conn. 225 (2017)



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