"accident" to cover an assault and battery.
Both the Forum and Liberty Mutual policies obligate the insurers to defend Allied Security against any claim within their coverage. Under Pennsylvania law,
an insurer's duty to defend is determined on the basis of the allegations of the complaint in the underlying action.
The duty to defend arises whenever a claim potentially comes within the coverage of the policy. Pacific Indemnity Co. v. Linn, 766 F.2d 754, 760 (3d Cir. 1985); Reliance Insurance Co. v. Lexington Insurance Co., 1987 U.S. Dist. LEXIS 4853, No. 86-6560 (E.D. Pa. 1987). Here, it can hardly be disputed that the administrator's claims fall within coverage B of the Forum policy as hiring and supervising of employees and providing a safe workplace, all of which, it is alleged, Allied Security negligently performed, are necessary functions in the conduct of security guard services.
Forum asserts, however, that exclusion three removes those claims from policy coverage; therefore, it does not have a duty to defend Allied Security. For the reasons that follow, I agree.
The phrase "arising out of and in the course of his employment" is not defined in either the Forum or Liberty Mutual policy. I find no reason, nor has any been proffered, why the phrase should not be given the same meaning under each policy.
If the administrator's claims in Trahey arise out of and in the course of Trahey's employment, they fall within coverage B of the policy issued by Liberty Mutual which then has a duty to defend.
If the converse is true, exclusion three of the Forum policy does not apply and it must defend Allied Security.
Defendants first contend that "arising out of and in the course of his employment" should have the same meaning as that ascribed to "arising in the course of employment" under the Pennsylvania Workmen's Compensation Act. This position, however, violates the traditional rule of construction that an insurance policy should be read to give effect to all of its provisions. See Galvin v. Occidental Life Insurance Co., 206 Pa. Super. 61, 211 A.2d 120, 122 (1965). If "arising out of and in the course of employment", in the Forum policy was intended to replicate the statutory definition of "arising in the course of employment", including the exception for third-party attacks for personal reasons, exclusions two and three of the Forum policy would be superfluous and exclusion three would never be operative.
In this regard, I join the analysis of my colleague Judge Norma L. Shapiro in Twin City Fire Insurance Co. v. Home Indemnity Co., 650 F. Supp. 785, 790-91 (E.D. Pa. 1986). Since the Act provides the exclusive remedy for any claims "arising in the course of employment" every claim covered by defendants' interpretation of exclusion three would be subsumed within exclusion two.
Moreover, the Liberty Mutual policy excludes from coverage B any liability under a workers' compensation law; thus, it is not reasonable to interpret both coverages A and B of that policy to apply only to statutory claims.
As noted earlier, the administrator has brought claims for injuries resulting from an assault by a co-worker for personal reasons. Such claims do not come within the boundaries of the Workmen's Compensation Act and since exclusion two of the policy is no broader than is the Act, coverage for the administrator's claims is not precluded by exclusion two. The remaining question is whether exclusion three applies to the administrator's claims. The administrator alleges that Trahey's death resulted from the fact that he was employed by Allied Security and that Allied was negligent in its hiring, supervising, and providing of a safe work place. These allegations are necessary to link Allied to Trahey's death and amount to alleging at least a "but for" relationship between his death and negligence by Allied. See, e.g. LaBonte v. National Gypsum Co., 110 N.H. 314, 269 A.2d 634 (1970) (allegation that attack was foreseeable to employer who had a duty to take all reasonable precautions which it failed to do, established that injury arose out of and in the course of his employment). In McCabe v. Old Republic Insurance Co., 425 Pa. 221, 228 A.2d 901 (1967), the Pennsylvania Supreme Court interpreted a clause which, as with exclusion three of Forum's policy, excluded claims for injuries "arising out of and in the course of his employment" to be clear, definite, and to describe a "but for" relationship between employment and injury. The administrator's having alleged a factual situation covered by exclusion three, Forum's policy is not applicable and Forum is not obligated to provide a defense or indemnify Allied in the action, Trahey v. Allied Security. By the same token, the administrator's allegations bring his case within the insuring provisions of Liberty Mutual's policy and it is therefore obligated to Allied. Moreover, while not before the court, it would appear that Liberty Mutual also is obliged to indemnify Allied to the extent of its policy limit based upon the jury's answers to the special interrogatories.
ORDER AND NOW, this 30th day of June, 1988, upon consideration of the parties' motions for summary judgment, it is hereby ordered as follows:
1. Forum Insurance Company has no obligation to provide a defense or coverage to Allied Security, Inc. or any other defendant in this action, under policy number SG 8000018 for claims brought in the Court of Common Pleas for Philadelphia County in Trahey v. Allied Security, Inc., No. 5086 (October term 1983).
2. Liberty Mutual is liable for the reasonable costs and expenses that have been or will be incurred in connection with the defense of the Trahey action.
3. Defendant Allied Security's counterclaim is denied.
4. Judgment is entered accordingly.