Insurance policies sometimes contain designated work exclusions that explicitly bar coverage for negligence claims resulting from specific work-related activities. Raymont, a snow and ice removal company, had a contract with a hospital to provide ice and snow removal services. Raymont had a policy with Nationwide Mutual Insurance that contained a designated work exclusion that barred coverage for “snow removal operations.” When the plaintiff in the underlying case removed the word “snow” from his complaint and alleged that he fell on an icy surface, the issue became whether the exclusionary language barred coverage for ice removal as well as snow.

In Raymont v. Nationwide Mutual Ins. Co., Raymont commenced a declaratory judgment action against Nationwide after Nationwide denied coverage on the grounds that: 1) a breach of contract does not qualify as an “occurrence which resulted in bodily injury or property damage;” and 2) a designated work exclusion bars coverage for “snow removal operations.” The trial court granted judgment in favor of Raymont and held that it was ambiguous whether the exclusion applied to ice removal as well as snow. The trial court did agree that Nationwide had no duty to defend the breach of contract claim.

Nationwide appealed to the Superior Court of Pennsylvania and argued that the ordinary meaning of “snow removal operations” includes not only the removal of snow but the treatment of ice as well. Furthermore, Nationwide cited the fact that Raymont did not seek general liability protection for ice and snow removal in its insurance application. Raymont’s contract with the hospital stated that Raymont was responsible for the removal and treatment of both ice and snow in the parking lot. Accordingly, the Superior Court held that “snow removal operations” applied to the whole process of snow removal and ice treatment. The Superior Court also noted that plaintiff’s removal of the word “snow” from his complaint was a blatant attempt to avoid a valid, applicable exclusion. The underlying case did not trigger a duty for Nationwide to defend and indemnify, and as a result, the trail court was reversed and the case remanded.

Thanks to Eric Clendening for his contribution.

For more information, contact Denise Fontana Ricci at .