The extent of coverage is often a function of how many occurrences (or accidents) are involved in a claim. For example, lawsuits based on product liability claims may involve a flawed manufacturing process constituting a single occurrence, or the sale of each individual product may result in hundreds of occurrences. A recent ruling involved the number of occurrences debate and resulted in the insured establishing coverage for up to $55 million instead of just $5 million in limits. 

In Oxford Community Schools v. MASB-SEG Property/Casualty Pool, Inc., the key dispute was about an ambiguity in the definition of “occurrence.” The dispute arose from a mass shooting at Oxford High School in Oxford Township, Michigan. The shooter killed four students and injured seven others, and the victims’ families subsequently filed state and federal lawsuits against the school district. The school district sought coverage for the lawsuits under its commercial general liability policy. The insurer agreed to defend and indemnify the school district; however, it took the position that the “bodily injury” claims in the underlying lawsuits were caused by one “occurrence.” Thus, according to the insurer, coverage was limited to only the $1 million limit available under the primary policy and the $4 million limit under the excess liability policy. The school district countered that the claims in the underlying lawsuits were separate “occurrences” for each individual injured, with each injury being caused by separate, independent decisions by the shooter to fire his weapon. So, rather than $5 million in total coverage, the school district was entitled to $55 million in limits with the $5 million limit applying separately to each of the eleven victims.

Unable to resolve the dispute with the insurer, the school district filed a lawsuit. It moved for partial summary judgment on its primary theory of multiple occurrences—i.e., that it was reasonable to read the policy as providing for a separate occurrence for each shot fired that caused an injury. It argued that the policy’s definition of “occurrence” was ambiguous and that, at the very least, the school district’s interpretation that each injury-causing shot constituted a separate “occurrence” was reasonable. In support of its argument, the school district noted that even the state of Michigan entered separate criminal charges against the insurer for each person the shooter shot because the state viewed each shot as a separate criminal offense.

The court found that the policy’s definition of “occurrence” was ambiguous and agreed that the school district’s interpretation of “occurrence” as applicable to each injury-causing bullet shot by the shooter was reasonable. In relying on the basic insurance principle that ambiguous language should be construed against the insurer, the court held that each separate gunshot fired by the shooter was a separate act with separate causes and effects, and thus, constituted a separate “occurrence” under the policy. Accordingly, the court granted the school district’s motion for partial summary judgment, and as a result, the school district may be entitled to $5 million in limits per occurrence. With eleven victims, the total coverage was capped at $55 million.

As this decision highlights, many insurance disputes involve not just the question of whether there is coverage but the extent of the coverage. The number of occurrences issue is one that arises in a variety of contexts, with the specific facts and policy language and the applicable law driving the outcome. Accordingly, it is important for policyholders to carefully review their policy’s definition of “occurrence” and how it applies to their claim to maximize coverage, no matter the nature of the risk.