INSURANCE LAW: Appellate Court holds claim for posttraumatic stress disorder barred by exclusion for business pursuits

The applicable insurance policy provided that it did not apply to “an occurrence arising out of the business pursuits or business property of an insured.”  The Connecticut Appellate Court holds that this exclusion barred coverage for an attack that occurred to the plaintiff while at the defendant’s home for a business purpose.

The underlying facts involve a plaintiff who worked for a construction company.  She was at the owner’s home when a masked intruder entered and demanded that she open the safe.  She was assaulted and threatened.  The business owner later returned, struggled with the intruder, and discovered that it was a longtime friend.  The business owner allowed the friend to leave and asked the plaintiff to remain at the office.  Eventually the intruder was arrested and convicted.  The plaintiff developed posttraumatic stress disorder and sued the business owner.

Reversing the Superior Court, which had found a duty to defend, the Appellate Court holds that the expansive “arising out of” language in the exclusion applied because the injuries “were connected with, had their origins in, grew out of, flowed from, or were incident to” the business owner’s “business pursuits”.

Nationwide Mutual Ins. Co. v. Pasiak, AC 36922 (Nov., 2015)