Babcock Business Advisor
June 30, 2005 - Vol. 2 No. 006

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Children of decedent limited to policy’s “each person” rather than “each accident” liability limit

The surviving children of a passenger killed while riding in his wife’s vehicle are limited to the “each person” rather than “each accident” liability limit of a Shelter Insurance Company policy, the Louisiana First Circuit Court of Appeal recently ruled. Hill v. Shelter Mutual Insurance Company, 2004-1643 (La. App. 1 Cir. 6/10/05). The policy language, the court found, limited the surviving children’s recovery to the same each person limit from which their father’s survival claim must be satisfied.

The Shelter policy defined the policy’s each person and each accident bodily injury coverage as follows:

(1) The limit of liability for COVERAGE A for “each person” is the limit of our liability for all damages, including damages for care and loss of services or consortium, arising out of bodily injury sustained by one person as the result of any one accident. “Bodily Injury sustained by one person” includes all injury and damages to others resulting from this bodily injury;

(2) The limit of liability for COVERAGE A for “each accident” is (subject to the limit for “each person”) the total limit of our liability for all damages, including damages for care and loss of services or consortium, arising out of bodily injury sustained by two or more persons as the result of any one accident.

Coverage A of the policy provided liability limits of $50,000 for “each person” and $100,000 limits for “each accident.”

The decedent’s children argued that because their claims involved separate bodily injuries – the first for their father’s suffering, and the second for their own suffering as a result of their father’s death – the higher “each accident” limits of the policy applied. The survival action, the children asserted, involves their father’s bodily injury (in essence the father’s claim) while the wrongful death action is a separate and distinct cause of action, involving each of the four children’s own bodily injury as defined by the policy. In effect, they urged, there were five “bodily injuries” in the case, entitling them to recover separate each person limits of the policy up to the each accident limitation. The appeal court rejected this argument, ruling the policy language clearly limited Shelter’s exposure to.

The wrongful death claimants (are seeking to recover damages they sustained as a result of the bodily injury to their father in the accident. Regardless of how the wrongful death claims are characterized in the law, plaintiffs’ claims are dependent upon the existence of bodily injury to another person in an automobile accident.

The court found the policy language clearly limits Shelter’s exposure for the wrongful death claims asserted by Mr. Cannon’s children arising out of his fatal injury in the accident to a single each person limited, thus limiting decedent’s four children for $12,500 each rather than the $25,000 each sought.

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