By Jeffery Thomas, Associate Dean for Academic Affairs and Professor of Law at the University of Missouri - Kansas City
Just a few days ago, the New Jersey Supreme Court cited the New Appleman on Insurance Law Library Edition § 19.04 in Abouzaid v. Mansard Gardens Associates, 2011 N.J. LEXIS 684 (June 21, 2011). It was cited for the proposition that it is a "nearly universal rule" in American jurisdictions that a duty to defend clause is enforceable if there is a 'potentially-coverable occurrence' that would be indemnified if proved valid. This shows the use of the Library Edition as an authoritative source.
The court held that because a plaintiff's claim for negligent infliction of emotional distress may involve physical sequelae and, therefore, is potentially covered by a "bodily injury" provision of a commercial general liability insurance policy, defense must be borne by the insurer unless and until the question of physical injury clearly drops out of the case. The question of whether emotional distress damages amount to "bodily injury" under the policy without some physical injury is still a hotly contested issue. See New Appleman on Insurance Law Library Edition § 18.02. The majority of courts require some physical injury or manifestation for emotional distress to be covered as a "bodily injury," see § 18.02[c], but a minority of jurisdictions will allow coverage for emotional distress as "bodily injury" without any physical harm or manifestation, see § 18.02[d].
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Read Jeff's recent blog, Blogs From the Advisory Board: The Whacky World of Uninsured and Underinsured Motorist Insurance.
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