Court Opinion

ID: 9853844
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:56:08.119824+00
Date Added: 2024-06-11T09:20:10.134980
License: Public Domain

Judge Wynn
dissenting
J. King Harrison Co., Inc. purchased a premises-operations policy covering acts of negligence occurring on its premises. As a result of a negligent act by company employees on the company’s premises, Mr. Deason was injured. Would a reasonable business expect to be *519covered under that policy for an act of negligence committed on the business premises which resulted in an injury off premises? I think so, and therefore dissent from the majority’s holding to the contrary.
In the instant case, the policy begins with a plain statement that coverage included liability for bodily injury and property damage “caused by an occurrence and arising out of the ownership, maintenance, or use of the insured premises.” After setting forth this brief description of the policy’s coverage, the policy goes on to list seventeen exclusions from coverage. In order to deny coverage under this policy, the insurer relied on the sixteenth exclusion, which limited coverage:
(p) to bodily injury or property damage included within the completed operations hazard or the products hazard.
The definitions section of the policy defines “completed operations hazard” as:
bodily injury and property damage arising out of operations or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs after such operations have been completed or abandoned and occurs away from premises owned by or rented to the named insured. “Operations” include materials, parts, equipment furnished in connection therewith. Operations shall be deemed completed at the earliest of the following times:
(1) when all operations to be performed by or on behalf of the named insured under the contract have been completed,
(2) when all operations to be performed by or on behalf of the named insured at the site of the operations have been completed, or
(3) when the portion of the work out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principle as part of the same project.
Operations which may require further service or maintenance work or correction, repair, or replacement because of any defect or deficiency, but which are otherwise complete, shall be deemed completed.
*520The completed operations hazard does not include bodily injury or property damage arising out of
(a) operations in connection with the transportation of property, unless the bodily injury or property damage arises out of a condition in or on a vehicle created by the loading or unloading thereof,
(b) the existence of tools, uninstalled equipment or abandoned or unused materials, or
(c) operations for which the classification stated in the policy or in the company’s manual specifies “including completed operations.”
In my opinion, the meaning of “completed operations hazard” is ambiguous under this policy. Ambiguities in insurance polices are strictly construed against the insurance company and in favor of the insured and coverage.1 This rule is particularly appropriate when construing exclusions from coverage, which are not favored by the law.2 Furthermore, policy provisions which extend coverage are construed liberally in favor of coverage.3 Finally, when an ambiguity exists, our case law has consistently held that it should be construed as a reasonable person in the position of the insured would have understood it to mean.4
A reasonable business in the position of the insured company would have understood claims such as Deason’s to be covered. By the policy’s terms of coverage, the company was protected for liability “caused by an occurrence and arising out of the ownership, maintenance, or use of the insured premises.” A company purchasing such a policy would certainly expect to be protected if the business operations injured a pedestrian walking on the street in front of the business. There would be no less of an expectation of protection if the effect of the operations was felt at a distance from the premises.
Furthermore, to insure for the act under the circumstances of this case but not the injury that arises from the act appears to defy *521logic. The injury that occurred here is precisely the type of liability that companies seek to insure in order to protect their company operations from potential multi-million dollar liability. Otherwise, the business would be exposed to substantial sources of liability, even though the company purchased protection from liability “caused by an occurrence and arising out of the ownership, maintenance, or use of the insured premises.”
I would construe this policy as providing coverage so as not to defeat the reasonable expectations of the insured company in this case.

. West American Insurance Co. v. Tafco Flooring East, 104 N.C. App. 312, 320, 409 S.E.2d 692, 697 (1991), disc. review denied, 332 N.C. 479, 420 S.E.2d 826 (1992).

. Id.

. C.D. Spangler Constr. Co. v. Industrial Crankshaft & Eng’g Co., 326 N.C. 133, 142, 388 S.E.2d 577, 563 (1990).

. Grant v. Emmco Ins. Co., 295 N.C. 39, 43, 243 S.E.2d 894, 897 (1978).