Insurance Co. of North America v. Sam Harris Constr. Co

In Insurance Co. of North America v. Sam Harris Constr. Co. (1978) 22 Cal.3d 409, two days after the insured sold his airplane, it crashed, allegedly due to his negligent maintenance. The seller's policy protected against liability arising out of the maintenance of the airplane. It applied to "'occurrences or accidents which happen during the policy period.'" (Id.at p. 411.) The Supreme Court found that the words "occurrences" and "accidents" as used in that policy presented an ambiguity in that they "rather suggest that accidents are distinguishable from occurrences." (Id. at p. 412.) The court interpreted the ambiguity in favor of the insured and ruled that "negligent maintenance of the plane within the policy period was an occurrence covered by the policy even though the accident caused thereby did not happen until after the policy period had expired." (22 Cal.3d at pp. 412-413.)