Opinion ID: 66507
Heading Depth: 3
Heading Rank: 1

Heading: First Specialty’s Insurance Coverage

Text: On 20 December 2001, 633 and Baye met with Thomas Kallman, a retail insurance broker, to obtain insurance coverage for a building owned and operated by them. In the course of this meeting, Kallman presented them with an insurance 2 proposal which they subsequently signed. This proposal indicated that it would be subject to policy terms and conditions and referenced an assault and battery exclusion. Later that day, 633 and Baye received a letter from Kallman’s insurance agency purporting to be a binder for the policy (hereinafter referred to as the “20 December binder”).1 The binder stated that coverage would be effective beginning 31 December 2001 and gave the limits on the amount of coverage; however, it did not mention any exclusions, including for assault and battery, or any particular conditions of coverage. On 27 December 2001, Bass Underwriters, an authorized agent of First Specialty, faxed a binder dated 26 December 2001 to Kallman (hereinafter referred to as “26 December binder”). Unlike the earlier binder, this document included a checklist of exclusions, all of which were checked, including the one for “Assault & Bat.” R2-56 at 22. Though this binder did not elaborate about the scope of the assault and battery exclusion, it stated that the policy was “subject to the usual terms and conditions in addition to” the listed exclusions. Id. The binder also mentioned that coverage would commence on 31 December 2001 and that the binder would be effective until 1 March 2002 or the date a policy was issued, whichever came first. 1 As discussed later in this opinion, First Specialty contends that this was not a binder but rather a notification to the companies that they were insured for particular amounts of coverage. 3 On 16 January 2002, First Specialty issued the insurance policy (“the Policy”), which still had an effective date of 31 December 2001. The Policy included an assault and battery exclusion, which stated: In consideration of the premium charged, it is hereby understood and agreed that this insurance does not apply to claims or “suits” for “bodily injury”, [sic] “personal injury” or death caused by or arising directly or indirectly out of or from an assault or assault and battery of any nature whatsoever, whether or not committed by or at the direction of the Insured, his employees, patrons or any causes whatsoever. R1-1, Exh. A. The Policy defined “bodily injury” as “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.” Id. The term “personal injury” was not defined in the Policy, but the phrase “personal and advertising injury” specifically covered injuries resulting from a variety of offenses, including “false arrest, detention or imprisonment.” Id.