The Illinois Appellate Court (First District) decided that there is only "one occurrence" when an insurance policy covers injuries incurred "at any time" from a single cause or event. In Ware et al. v. First Specialty Insurance Corporation,¹ the Court held that a porch collapse — that killed 13 people and injured 29 more — was the sole cause of the deaths and injuries, and, therefore, the single occurrence policy limit governed. This victory for First Specialty has broader significance to insurers seeking to limit their liability in multiple injury cases.

The Background

In June 2003, a house party at an apartment building in Chicago turned deadly when a three-story porch collapsed. Twelve people perished immediately, another died from injuries, and 29 more suffered injuries, many of which did not manifest for days or weeks after the collapse. First Specialty insured the property under a policy with a $1 million per occurrence limit and a $2 million general aggregate limit.

After the estates of the deceased along with the injured individuals (collectively, the "plaintiffs") settled their claims with the insureds, First Specialty (the primary insurer) and Philadelphia Indemnity Insurance Company (the insureds' excess carrier), the plaintiffs obtained an assignment of rights against First Specialty to attempt to recover the difference between the $2 million general aggregate limit and the $1 million per occurrence limit. The plaintiffs filed a declaratory judgment action arguing that First Specialty must pay the plaintiffs the $2 million aggregate limit because the porch collapse and the injuries constituted multiple occurrences.

On cross-motions for summary judgment, the trial court determined that the porch collapse was only one occurrence because it alone caused all of the injuries. Therefore, First Specialty did not need to pay the $2 million aggregate limit. The plaintiffs appealed.

The Appellate Opinion

Although the parties agreed that all injuries were caused directly and solely by the porch collapse, the plaintiffs argued that — because some injuries manifested only after the porch collapse — there were multiple occurrences. First Specialty argued that the porch collapse constituted a single occurrence because it was one singular, uninterrupted accident that caused all of the injuries.

The Appellate Court examined the policy language defining "occurrence" and "bodily injury," and highlighted that the $1 million per occurrence limit applied to injuries arising "at any time" from an accident. Therefore, based on the policy's unambiguous language, the Appellate Court affirmed the one occurrence ruling.

However, the Appellate Court considered two approaches that Illinois courts have applied to determine whether a particular case involves one or multiple occurrences in cases where the policy language is ambiguous: the "cause theory" and the "time and space test." The "cause theory" looks at how many separate events or conditions led to the parties' injuries, and the time at which injuries manifest themselves is irrelevant to the number of occurrences. Applying the "cause theory," the Appellate Court determined that the collapse was only one occurrence because the parties agreed that the collapse was the single cause of all of the plaintiffs' injuries.

Next, the Appellate Court considered the "time and space test," articulated in Addison Insurance Co. v. Fay, 232 Ill. 2d 446 (2009), which considers whether multiple injuries are sustained over an open-ended period of time due to an "ongoing negligent omission," rather than a singular affirmative act of negligence. Although the plaintiffs advocated for the "time and space test" to yield multiple occurrences here, the Appellate Court found that the injuries were not caused by ongoing negligence. Instead, the injuries were caused directly and solely by a single incident. Even applying this test, the Appellate Court concluded that the porch collapse was one occurrence because the plaintiffs' injuries were closely linked in time and space.

Therefore, under (i) the policy's unambiguous language, (ii) the "cause theory," or (iii) the "time and space test," the Appellate Court reached the same conclusion: the porch collapse was one occurrence.

What It Means

This decision is significant because it examines the different tests applied by Illinois courts in deciding the number of occurrences. Insurers should consider this ruling when evaluating whether a claim involves one or multiple occurrences. Depending on the circumstances, the insured's retention, and other policy terms, insurers can evaluate which test applies and best supports their occurrence arguments in multiple injury situations. Policy holders likewise can view this case as instructive on the importance of the cause of injury in determining the number of occurrences.

_{1 Jean Ware et al. v. First Specialty Insurance Corp., 2012 IL App (1st) No. 1-11-3340.}