Insurance companies are very careful about what they cover and what they exclude. With homeowners policies, for example, outbuildings may not be covered. If you have a shed or a playhouse, you would need to purchase additional coverage for that. Medical malpractice insurance does not cover illegal acts; if the physician is accused of assault, for example, the insurance company will not pay for the doctor's defense attorney and will not pay any damages awarded to the victim.
Sybrina Fulton, the mother of Florida teen Trayvon Martin, may run up against a similar exclusion in her claim against the homeowners association where her son was killed. The policy excludes coverage for a loss in connection with a claim based on bodily injury, sickness, mental anguish, emotional distress, disease or death of any person. However, the exclusion is not in force if the mental anguish or emotional distress claim is related to a claim for wrongful employment practices.
Policy language is often confusing, and the insurance company has asked a court to confirm the insurer's belief that Martin's death is, in fact, excluded. If the court does agree, the insurer would have no duty o defend and would not have to pay the claim.
The court would have an easier job of deciding if the policy did not include the language about mental anguish/emotional distress related to wrongful employment. Martin was a teenager when he died, so Fulton's claim likely did not ask for damages for lost wages or any other strictly monetary loss. She could have filed the claim based on the emotional damage wrought by Martin's killer. If that were the case, the court would have to consider the wrongful employment language.
Martin's killer was the captain of a neighborhood watch group. Though the group was apparently not affiliated with local law enforcement in any way, the watch may have been organized by the HOA. The question for the court could be whether the neighborhood watch volunteers were the agents of the homeowners associations. If they were, the wrongful employment exception could bring the claim back under the policy.
Fulton and Martin's father have filed claims with other insurance companies, and they have filed with the U.S. Patent and Trademark Office to trademark two slogans, "I am Trayvon" and "Justice for Trayvon." Back in March, the Florida Attorney General's office notified Martin's parents that their claim for emergency crime-victim assistance under the state's Bureau of Victim Compensation had been approved.
Source: Orlando Sentinel, "Trayvon Martin family's HOA insurance claim lands in federal court," Jeff Weiner, Aug. 6, 2012