skip to Main Content

INSURANCE LAW: District Court grants declaratory judgment pursuant to exclusion for home daycare business

INSURANCE LAW: District Court Grants Declaratory Judgment Pursuant To Exclusion For Home Daycare Business

The underlying complaint alleged that a claimant was injured while retrieving his child from a daycare operation on the premises operated by the insured.  It was alleged that the homeowner’s dog bit the claimant, causing bodily injury.  The insurer declined to defend and indemnify.

In a subsequent coverage action, the court considered an exclusion which states: “If an insured regularly provides home daycare services to a person or persons other than insureds and receives monetary or other compensation for such services, that enterprise is a business.  The mutual exchange of home daycare services, however, is not considered compensation.  The rendering of home daycare services by an insured to a relative of an insured is not considered a business.  Therefore, with respect to a home daycare enterprise which is considered to be a business, this policy does not provide Section II – Liability Coverages because a business of an insured is excluded under Exclusion 1.b of Section II – Exclusions.”

The court holds that the claimant’s injury was incident to a business activity and that coverage is therefore excluded under the policy.  The court further rejects the claim that a duty to defend existed in the case, noting that “the complaint’s allegations are not materially different from the factual findings made in the underlying case’s damages proceedings or the undisputed facts presented on summary judgment.”

Vermont Mutual Ins. Co. v. Samson, 2017 WL 1091268 (D.Conn. Bryant, J.)