Kathryn Norman Insured Case Study

Under the insured’s businessowners policy, State Farm has a duty to defend and indemnify the insured against any “suit” seeking “property damage” to which “this insurance applies.” Accordingly, in order to fall within the coverage provisions of the policy, the following elements must be satisfied: 1) the person seeking coverage must be an insured; 2) the insured must seek a defense against a suit; 3) the suit must allege “bodily injury,” “property damage,” or “personal and advertising injury”; and 4) the insurance must apply. In the liability section of the policy there would appear to be little dispute that Kathryn Norman is an insured.

A “suit” is defined to include a “civil proceeding in which damages because of ‘bodily injury’ . . . to which this insurance applies is alleged.” At present, no suit has been filed against the insured for the losses sustained. Determining whether an insurer has a duty to defend is accomplished by comparing an insured’s policy against allegations made against the insured in a complaint. Under the Section II – Liability part of the policy, a suit is a condition precedent to the insurer’s obligation to either defend or indemnify the insured for liability
Although the “while performing duties” provision has not yet been interpreted by Maryland’s appellate courts, the federal fourth circuit—while interpreting Maryland law—held that a crime committed at work was not a completed “while performing duties” because “[t]here is no suggestion that the [crime] constituted part of [the employee’s] job description nor that the subsidiary act of accomplishing it . . . could be characterized as the exercise of a duty.” Selective Ins. Co. v. Oglebay, 242 F. App’x. 104, 108 (4th Cir. 2007) (sexual assault by a driver’s education instruction while teaching is not done “while performing