No Coverage For Intentional Damage By Store Owner

Commercial Liability	Fire
Exclusions–Intentional	Property of Others

The co-owner of a clothing store set fire to the store and its contents, with substantial damage to a shopping center and surrounding stores. The issue in litigation that followed was whether the store owner's general liability insurer provided coverage so as to entitle property insurers of other tenants and the shopping center to recover their losses.

The general liability insurer denied liability based on the policy definition of a covered occurrence as "an accident.... which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured...." Both the trial court and the appeal court concluded that the insured did not intend to destroy the property of others, and the exclusion did not apply. The matter was then reviewed by the Louisiana Supreme Court.

It was estimated that the insured used four to five gallons of gasoline in a 25 x 82-foot space to start a fire that would have destroyed the shopping center, experts testified, without the fast response of firefighters. The court found the amount of fluid excessive for intent to destroy only the man's merchandise. Secondly, the court said, "....no reasonable person would believe that his insurance policy would provide coverage for his criminal act of arson."

The court concluded that the insured "....either intended to cause damage to the building and property of others surrounding him or knew that such damage was substantially certain to follow. Such damage was, therefore, expected or intended from the standpoint of the insured."

The judgment of the trial court, affirmed by the appeal court, was reversed in favor of the liability insurer and against the parties seeking reimbursement.

Great American Ins. Co., Appellant v. Gaspard ET AL., Appellee. Louisiana Supreme Court. No. 92-C-0702. November 30, 1992. CCH 1993 Fire and Casualty Cases, Paragraph 3999.