New Hampshire: Negligence Claims Precluded by Sexual Molestation Exclusion, Court Rules

A homeowners’ policy provision excluding coverage for injuries arising from sexual molestation precluded coverage for claims against an alleged perpetrator’s parents’ negligent supervision and entrustment, the New Hampshire Supreme Court ruled recently.

In Philbrick v. Liberty Mutual Fire Ins. Co., decided Oct. 31, the Supreme Court reversed a lower court ruling that the exclusion was not applicable because it could be read to preclude coverage only where the insured is the perpetrator and was therefore ambiguous.

In reaching its holding, the court relied upon a 2003 decision, Preferred National Insurance Co. v. Docusearch, Inc., in which it ruled that, since damages are an essential part of a negligence claim, a claim is not covered when it involves damages that arise “entirely out of an act that would not be covered under an insurance policy.”

The court acknowledged that some courts have reached different conclusions in interpreting similar exclusions, but pointed out that its approach was consistent with a broad reading of the phrase “arising out of” that some other courts have adopted.

Direct questions to NAMIC State Affairs Manager Paul Tetrault.

Posted: Tuesday, November 20, 2007 12:00:00 AM. Modified: Tuesday, November 20, 2007 10:34:58 AM.

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