Understanding why the defendants in that case aren’t just writing a check to the injured people requires a brief look at insurance law. As you probably know, insurance covers you when you are negligent. Negligence is defined by the law as the “when a person, without intending to do harm, does something (or fails to do something) that a reasonable person would recognize as creating an unreasonable risk of injury or damage to a person or property.” The key issue is “without intending to do harm.” Insurance covers us for actions we take when we don’t mean to hurt someone, but do. For example, adjusting the radio and blowing a red light. You didn’t intend to hurt the other driver, but fiddling with the radio when you should be paying attention to your driving is negligent.
Insurance (generally) does NOT cover intentional acts. This makes sense – what insurance company would ever agree to cover you for things you intended to do? If you bought an insurance policy with the intention of running into another person, the insurance company would be paying not for the risk you might do something wrong, but for your desire to do something wrong without suffering the consequences. (Interestingly, this defense to having to pay is frequently raised by insurance companies when a person intentionally drives their car into a wall or another person to kill themselves – that the act is not covered because it was intentional). Many policies do not cover reckless acts either.
Insurance law also does not usually (although it may) cover punitive damages. Why? There are various reasons. First, that given their dependence on the egregiousness of the conduct (rather than specific damages) they are difficult to rate and assess premiums for. Additionally, having insurance coverage for punitive damages eliminates their punitive aspects. Also that punitive damages imply actions that are either intentional, reckless, or so far afield from ordinary negligence that companies do not want to cover them.
So, turning to the O’Donnell Park verdict, recall that the damages awarded included punitive damages (as we discussed previously). The insurance company for Advance Cast Stone apparently plans to argue that based on the jury’s findings that the actions of the liable company merited punitive damages, that the company itself must pay those damages, as they are excluded from the insurance policy. It appears they are also arguing that Advance Cast’s actions in installing the panels was an intentional act (they intentionally installed them wrong) and not a negligent act, thereby eliminating the insurance coverage.
These questions are a multi-million dollar issue for the Advance Cast’s insurance company. Thus, it appears a second trial will be held on the issue of whether there is insurance coverage for the acts of the worker – whether the “drill and pound” method was an intentional act. If it was, then there would be no insurance coverage for ANY of the verdict, and the people who were injured will be left with an empty verdict – victorious in name only.
So we will continue to watch this tragic case play out over the next several months to see whether the innocent people so irreparably harmed in this tragic event will ever recover.