Occurrence Insurance Policy Definition
The Supreme Court has addressed two cases in which insurers refused to indemnify their insureds on the basis that the incidents at issue were not "occurrences" as defined in the respective insurance policies.
In both cases, "occurrence" was defined, in part, as an "accident."
In the later case, Nabozny v. Burkhardt, 461 Mich 471; 606 NW2d 639 (2000), our Supreme Court analyzed the facts using the same principles that it applied in its earlier case, Frankenmuth Mutual Ins Co v. Masters, 460 Mich 105; 595 NW2d 832 (1999).
In Masters, the Court explained:
Using the common meaning of the term, we have repeatedly stated that "an accident is an undesigned contingency, a casualty, a happening by chance, something out of the usual course of things, unusual, fortuitous, not anticipated, and not naturally to be expected." After some debate concerning the issue, we have also held that the definition of accident should be framed from the standpoint of the insured, not the injured party.
We also hold that the appropriate focus of the term "accident" must be on both "the injury-causing act or event and its relation to the resulting property damage or personal injury."
Of course, "an insured need not act unintentionally" in order for the act to constitute an "accident" and therefore an "occurrence."
However, where an insured does act intentionally, a problem arises "in attempting to distinguish between intentional acts that can be classified as 'accidents' and those that cannot." In such cases, a determination must be made whether the consequences of the insured's intentional act either were intended by the insured or reasonably should have been expected because of the direct risk of harm intentionally created by the insured's actions. When an insured acts intending to cause property damage or personal injury, liability coverage should be denied, irrespective of whether the resulting injury is different from the injury intended. Similarly, ... when an insured's intentional actions create a direct risk of harm, there can be no liability coverage for any resulting damage or injury, despite the lack of an actual intent to damage or injure.Masters, supra at 114-116.