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AMERICAN MUT. LIAB. INS. CO. v. MACFARLANE FIRE PR

June 24, 1958

AMERICAN MUTUAL LIABILITY INSURANCE COMPANY, Plaintiff,
v.
MacFARLANE FIRE PREVENTION CORPORATION, Defendant



The opinion of the court was delivered by: BYERS

This case, in which a declaratory judgment is sought, involves the single question of whether the defendant has forfeited its right to call upon the plaintiff, its insurer, to defend certain civil actions in which it is a co-defendant. They are based on circumstances about to be related.

The facts are not in dispute, which dispenses with the necessity for findings.

The defendant's business is to render services to owners and occupants of buildings in the cause of fire prevention. Among other things, it conducts fire drills on the premises of its customers; also it inspects fire alarm systems and makes replacements therein not to exceed an amount stipulated in the service contract.

 The policy issued by the plaintiff is called a 'Comprehensive General Liability Policy' and is in evidence as Plaintiff's Exhibit 1, and was in effect at the time material to this controversy.

 Relevant portions of the policy are quoted:

 'I. Coverage A -- Bodily Injury Liability.

 'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person and caused by accident. 'Coverage B -- Property Damage Liability.

 'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.'

 There were certain riders attached to the policy which need not be quoted except as follows:

 'Effective 1/1/52.

 '1. Coverage A (Bodily Injury Liability) and Coverage B (Property Damage Liability) of insuring agreement 1 are amended to exclude the words 'and caused by accident.'

 '2. Wherever in the policy the word 'accident' appears, it shall be construed to mean 'occurrence."

 3. (This has to do with the computation of premium and is not important to this cause.)

 The substitution of the word 'occurrence' for 'accident' probably broadens the coverage so as to include an incident or an episode.

 The clause having to do with notice reads ...


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