A Single Occurence under CGL Policy
In Bituminous Casualty Corp. v. Iles., Commercial general liability (CGL), insurer, brought an interpleader action, so that injured oil well workers or their estates could assert claims against deposited funds and establish among themselves their respective rights and claims to any of the funds. Oil well workers injured in an oil and gas well explosion, and the estates of oil well workers killed in the explosion, counterclaimed requesting a declaration that the policy limits available to compensate them was the general aggregate limits, rather than the each occurrence limits.
The court addressed the issue of whether the policy is ambiguous with respect to the limits of Bituminous Casualty’s liability, with respect to a single occurrence under the CGL policies. When the provisions of the CGL policies are considered as a whole, the unambiguous language provides that the maximum amount that Bituminous Casualty is required to pay for a single occurrence is the Each Occurrence Limit provided for in each policy. Specifically, paragraph 5 of section III of the policies states that the Each Occurrence Limit is the most the insurance company will pay for bodily injury “arising out of any one ‘occurrence’.” Since the parties agree that the injuries resulting from the well explosion were caused by only one “occurrence,” this unambiguous language of the policies limits Bituminous Casualty’s coverage to the Each Occurrence Limit for each policy.
In the present case, the language of coverage A of the policies defines the circumstances in which the insurance company will cover the insured’s liability for bodily injury. Coverage A applies only if the bodily injury “is caused by an ‘occurrence’ that takes place in the ‘coverage territory’.” Therefore, in determining whether Bituminous Casualty will pay for a bodily injury, a policy reader must first determine whether the injury was the result of an “occurrence” in the “coverage territory.” In the present case, the parties agree that the bodily injuries and deaths that resulted from the well explosion were caused by an occurrence in the coverage area.
Next, the policy directs the reader to section III to determine the maximum amount the insurance company will pay. As noted in our analysis above, the language of the Each Occurrence Limit unambiguously limits the amount Bituminous Casualty will pay for “any one ‘occurrence’;” and in the present case, the parties agree that the injuries and deaths resulted from only one occurrence. Therefore, the Each Occurrence Limit applies to the oil well workers’ claims in the present case. Next, the reader looks at the General Aggregate Limit to see the most the insurance company will pay for the “sum of” claims that are paid within the Each Occurrence Limit to determine the “aggregate” amount it will pay during the policy period.
The court determined, based on other Illinois case law, that the language of the policy unambiguously establishes that the occurrence limit applies when multiple claims of bodily injury arise from a single occurrence. It is not necessary to incorporate any of the language of coverage A into the language establishing the General Aggregate Limit in order to understand whether it applies to a single occurrence. As noted above, the meaning of the Each Occurrence Limit and the General Aggregate Limit can be determined by simply reading section III as a whole. Section III’s reference to coverage A merely informs the reader that the policy limits being described applied to any damages that are payable under coverage A.
The court held that CGL policies limited insurer’s coverage for injuries and deaths caused by an oil and gas well explosion to the each occurrence limit for each policy, and endorsement changes in CGL policy were not ambiguous with regard to when the general aggregate limit applied.
Bituminous Casualty Corp. v. Iles., 2013 WL 3935063 (Ill.App. 5 Dist.) (This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1))
