Assault & Battery Coverage Overview
For many of you in the hospitality business, Assault & Battery is an essential protection to have, particularly if your establishment serves alcoholic beverage on premises.
Assault is usually defined as "a threatening act, physical and/or verbal, which causes a person to reasonably fear for life or safety." Battery is generally defined as "the unlawful application of force to another's person; physical striking of another without permission."
As the insured, your liability for Assault & Battery is excluded under all standard general liability policies, whether commercial or homeowners. The reason is simple: when you hit someone, that is an intentional act, which is not covered the same way you would not have coverage if you deliberately burnt your building down or pushed your car over a cliff because you wanted a new home or vehicle.
However, when you operate a business that is open to the public you may have a situation where two or more patrons come into your business or onto your premises and assault and/or batter one another.
Occurrences that fall under "Assault & Battery" include fights, stabbings, shootings, attempted robberies, and hit-and-runs.
This can affect you in a couple of ways. For starters, you'll most certainly face a claim under the General Liability portion of your policy for the altercation, either from one or all of those responsible for the altercation, or another patron that was nearby and injured in the altercation. If your business serves alcohol, you will probably also face a claim under your Liquor Liability policy, alleging that the altercation was the result of one or more patrons being served too much to drink.
General Liability Policy
If you're with a standard market carrier, assault and battery coverage is normally included on your GL policy, unless you've had claim problems in the past and your insurer has stripped the coverage out.
A problem with your coverage for General Liability A&B claims can occur when you wind up with a "surplus or excess" market (one not covered by your state's guarantee fund, usually only accessible through a broker or series of brokers). In many instances, they will not offer A&B coverage at all, or if they do, it is an additional coverage you must "buy back". Even then, coverage is generally capped via an Assault & Battery sub-limit. For example, if you may have a $500,000 or $1,000,000 occurrence limit on your General Liability policy, but for Assault & Battery, if you can buy it, may be capped at as little as $25,000 or $50,000. In many Assault & Battery claims, this may be woefully insufficient.
Liquor Liability Policy
Assault & Battery coverage on Liquor Liability is much more inconsistent. Many carriers, even highly-rated, standard market insurers may not offer A&B coverage on their liquor liability policies.
Again, if you're with a non-standard, surplus or excess market insurer, you'll likely have to "buy back" A&B coverage, and again, it will likely be a small fraction of what your Liquor Liability occurrence limit is.
As always, you should read your insurance policy closely.
Claim Confusion
Assault & Battery claims, like any other, are no fun for anyone involved. While you may not have suffered any direct damage, an incident of large enough scale may wind up in the local paper or on the news. Either way, you'll still be thrust into the middle of a claim investigation.
The biggest headache could occur when you have different insurers providing your General Liability and Liquor Liability coverages. If the persons involved had been served alcohol, then in most states you would have to prove that they had been over-served. You could wind up in a situation where your liquor insurer believes the claim should be filed as a General Liability A&B claim, while the General Liability insurer believes the claim should lie with the Liquor Liability insurer as a liquor A&B claim.
Matters could be compounded if, as described several paragraphs above, you had a small sub-limit for Assault & Battery. Even if the claim is covered, your actual limit may fall well short of the amount of the claim, leaving you to cover the loss yourself. Things can get worse still further if you had an Assault & Battery exclusion on your General Liability policy, and the Liquor Liability insurer denied coverage. Then you're left with no defense, nor coverage at all.
In Summary
As a leading insurer of hospitality risks in the Midwest, these are the little things we take care of that less specialized agents may overlook. By serving thousands of clients in this field, we've learned to watch not just the broad, obvious exposures your business may face, but the smaller perils that threaten your livelihood as well, and we know how to best protect your establishment from them.
