Question from an IIABNY member: We have an insured that is taking in three foster children from Family Court. The mother of the children is heading to jail for a year. She is an approved foster home under our county’s social service program. Our insured has a concern that, if something should happen to the children, will she have any coverage (if the mother sues her for negligence). So IF one of the children is injured/dies using the insured’s swimming pool, etc., will her HO policy defend her? We have called our carrier for their input and they said the same thing I did……good question!
Answer: In my opinion, her Homeowners policy will not provide liability coverage if one of the foster children is injured, though at least one New York court has said otherwise. I’ll assume that the insured has the equivalent of the ISO Homeowners 3 policy, HO 00 03 05 11. Section II – Liability Coverages states:
A. Coverage E – Personal Liability
If a claim is made or a suit is brought against an "insured" for damages because of "bodily injury" or "property damage" caused by an "occurrence" to which this coverage applies, we will:
1. Pay up to our limit of liability for the damages for which an "insured" is legally liable. Damages include prejudgment interest awarded against an "insured"; and
2. Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent. …
The Exclusions section states:
F. Coverage E—Personal Liability
Coverage E does not apply to: …
6. "Bodily injury" to you or an "insured" as defined under Definitions 5.a. or b.
This exclusion also applies to any claim made or suit brought against you or an "insured" to:
a. Repay; or
b. Share damages with;
another person who may be obligated to pay damages because of "bodily injury" to an "insured".
So, the question is, do the foster children fall within the policy’s definition of “insured”? In my opinion, the answer is “yes.” Definition 5.a. states:
5. "Insured" means:
a. You and residents of your household who are:
(1) Your relatives; or
(2) Other persons under the age of 21 and in your care or the care of a resident of your household who is your relative;
The foster children are persons under the age of 21 who are in the care of the named insured, and they would be residing with her. Therefore, in my opinion, they are also insureds, so Exclusion 6 applies.
That said, this is my opinion only. A New York trial court in Seneca County disagreed with me in 1999. The wording in the HO policy was a bit different than that which I quoted above. It doesn’t look like the carrier appealed. Whether a court’s decision would go the same way under a different set of facts is anyone’s guess.
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