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Vol. 12 - Issue 4

May 8, 2023


Take Care: It’s A $6 Million Issue


At issue in Commerce Ins. Co. v. Philadelphia Indem. Ins. Co., No. 21-40053 (April 27, 2023) was a dispute between two insurers over coverage for a rape.  The victim was in her office. The rapist had been seen earlier in the building and his presence reported to building management and security, but neither took steps to remove him.

Putting aside who insured whom, who was the landlord and who was the tenant and additional insured issues under the lease – none relevant to the discussion -- Commerce Insurance settled the underlying negligent security claim for $6 million and sought indemnification from Philadelphia Indemnity Ins. Co.     

At issue before the court was the applicability of an Abuse or Molestation exclusion under Philadelphia’s commercial general liability policy.  The exclusion provided: “This insurance does not apply to “‘bodily injury’ . . . arising out of: . . . [t]he actual or threatened abuse or molestation by anyone of any person while in the care, custody, or control of any insured.’”

First, the court held that, while “molestation” was undefined, rape fit within its definition.  The issue that received more attention was whether the victim was in the “care” of the insured-landlord at the time of the assault.

The court first looked at the definition of “care,” noting that it includes “charge, supervision, management: responsibility for or attention to safety and well-being . . . . One may be in the care of another, without being in the custody of or in the control of another.” (citations and internal quotes omitted).

Based on this definition of “care,” the court held: “A tenant is in the care of his or her landlord. . . .  That the Underlying Defendants were responsible for the safety and well-being of Rosenquist in the building is supported by the fact that the Underlying Defendants provided security services to the building and were informed of Damon’s presence before the attack, yet the building security guard failed to remove him from the premises, as is undisputed by the parties.”





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