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Murder! Covered or NOT Covered on the Landlord’s Policy?

23 Aug
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This is a question debated more often than you might think.

If a murder occurs at a premises, when and to what extent is the landlord held legally responsible for the loss and if the landlord’s liability policy will respond to the claim. This is not a new question but one that has been adjudicated in various states over the last decades.

Let’s begin with the case of Rosales vs Stewart in 1980 ( 113CA3d130,169 CR 660.). The tenant (plaintiff) brought a wrongful death action against their landlord (defendant) on the grounds that the landlord was responsible for renting to a tenant who fired a gun on the premises that resulted in the death of the plaintiff’s daughter who was on an adjoining property at the time. In this case the court held that a landlord can be held responsible for the acts of their tenant if two tests are met:
1. The landlord knew of the tenant’s propensities for violence before leasing to him or renewing a lease or;
2. The landlord could have terminated the tenancy after acquiring such knowledge before the act was committed.

The issue of responsibility and the test imposed by the court is only one part of our concern. The second part of the question is whether this is covered on the landlord’s liability policy. Needless to say, the specific insurance policy written would have to be reviewed in order to determine this answer on a case by case basis.

By way of example we will look at a case from the New York Court of Appeals: Agoado Realty Corp.et.al v. United International Insurance Company, Appellant, et al-Court of Appeals of New York June 20, 2000 733 North Eastern Reporter 2d213.

Let’s begin with the facts of the case. The insured owned a building in which a tenant was murdered by an unknown party. Ten months later the estate of the victim filed a wrongful death action against the landlord alleging negligent security along with other causes. The landlord (defendant) had a CGL policy covering Bodily Injury and Property Damage if caused by an “occurrence” that occurs on the insured premises. In the policy the term “occurrence” was defined as an “accident”. As is typical in a CGL, the policy excluded “bodily injury that was expected or intended from the standpoint of the insured. The landlord’s policy did not have separate language excluding “assault and battery”.

In this case the higher court held that “murder” constituted an “accident” under the policy. While the murder was “intentional” on the part of the assailant, it was an accident from the perspective of the insured. The complaint went on to allege that there was negligent security and demonstrated that the incident, the murder, was unexpected, unusual and unforeseeable from the “insured’s standpoint”. The end result and answer to the “certified question” of this case on appeal was whether murder was an accident under the landlords’ policy and therefore, covered. The higher courts opinion was that murder was a covered occurrence and the policy exclusions did not apply to the circumstances presents.

We have to give some importance to the last part of that sentence being based on the “circumstances presented” as each case has its own set of circumstances and, of course, its own policy language. Also with the understanding the various states may treat these issues differently.

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