You slipped and fell on a spill during a party at another person’s home when the host who was smoking weed spilled their drink.  Now, the host’s homeowner’s insurance carrier is denying your claim based upon a “Controlled Substances” exclusion in the host’s homeowner’s policy, which bars coverage for claims "arising out of" the use, transfer or possession of controlled dangerous substances, and when the role that the controlled dangerous substances played in bringing about underlying plaintiff's injuries is in dispute.  

While the insurance carrier in the example above may seem right to the untrained eye, we here at Verp and Leddy know that such a denial of coverage is improper and in bad faith.   The Supreme Court of New Jersey has held that an insurer's use of the phrase "arising out of" with no further qualification makes the exclusion ambiguous, requiring an interpretation consistent with the insured's reasonable expectations. For the exclusion to apply the Court held, the injury must "originate in," "grow out of" or have a "substantial nexus" to the excluded act of drug use, transfer or possession.  The Supreme Court has explained that the exclusion does not apply to bar coverage where the use of drugs is merely "incident to" or "in connection" with the injury alleged. That is the case where there are concurrent causes of injury alleged, such as in the example above where the spilled liquid was actually the cause of the injury.

You must hire the right lawyer if you intend to take on big insurance and prosecute your bodily injury claim. Verp and Leddy can help you. Contact us for a consultation!