Insurer shouldn’t cover ex-patients who set fire to their own apartments – judge

A federal judge rejected a request to declare two mentally ill patients as “additional insureds” on a non-profit’s policy after they set fire to their own dwellings

Insurer shouldn’t cover ex-patients who set fire to their own apartments – judge

Non-Profits & Charities

By Ryan Smith

An insurance company shouldn’t have to pay for damages after two mentally ill patients set fire to their own apartments, a federal court has ruled.

Philadelphia Indemnity Insurance Co. insures Bell Socialization Services, a non-profit that helps mentally ill people move out of hospitals and into private apartments. Two Bell clients, Anna Carson and Steven Sponseller, were placed in units at Suburban Park Apartments. Both attempted suicide by setting fire to their apartments in separate incidents in 2007 and 2008. Both fires caused severe damage to the apartment complex.

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Greater New York Mutual Insurance Co., which insured Suburban Park, argued that Carson and Sponseller should count as additional insureds under Philadelphia Indemnity’s policy with Bell. But last week, Chief Magistrate Judge Susan E. Schwab shot down Greater New York’s request for a declaratory judgment to that effect.

Greater New York had argued for including Carson and Sponseller as additional insureds by citing a clause in Bell’s policy that extended coverage to “club members” engaged in activities performed on behalf of Bell.

“The activities that are in dispute are the fires that Ms. Carson and Mr. Sponseller set of their own accord,” Schwab wrote in her ruling. She pointed out that arson and attempted suicide could hardly be considered activities performed on behalf of the non-profit.


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