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Trigger Words

Why language matters, and how it shapes coverage decisions

February 10, 2021 Photo

“Riot,” “insurrection,” “civil protest,” “domestic terrorism,” and “rally” are some terms used to describe the event at the U.S. Capitol that occurred on Jan. 6, 2021. These terms trigger various opinions as to the nature of the event, but do those same words trigger coverage grants or exclusionary terms as well?

Labels alone do not determine coverage; the attendant facts are paramount. However, framing the issue and related facts for an ultimate coverage assessment starts with language. The terms describing this event match much of what is found in insurance policies. However, the coverage assessment does not stop there. Facts of the activities leading up to the event, facts during the event, and facts subsequent to it will be critical in a final coverage determination for the various potential first- and third-party-related claims.

Generally, riot and civil commotion are covered perils, although some policies are starting to see updated revisions that narrow these coverages as the loss exposures increase. Insurrection and invasion perils are typically excluded, given the breadth of exposure.   

Judges reviewing various coverage provisions’ terms will find the language used to frame the event compelling, but will necessarily consider the facts surrounding the event. What was the purpose of the actors? What declarations have been issued around the event, and who has declaration authority? What charges have been brought and do they relate to individuals or to group participants?

The indicated intent of participants and the legal elements of descriptive terms of the event are key in the fact-finding process. Factors include the language used prior to the event as the stated purpose for attending by various individuals and groups; whether commonality of purpose was stated by various participant groups; the stated purpose for those who entered the Capitol building after the initial gathering; whether the entry purpose differed from the initial intent; and whether similar language was used by the participant groups and whether that language changed between the initial speeches and the forced entry into the Capitol building. The evolving fact-finding around the events of Jan. 6, 2021 may create an evolving coverage landscape.

A Look at Language

What is the definition of “riot”? The Federal Anti-Riot Act, 18 U.S. Code C. 2102, defines “riot” as

“…a public disturbance involving (1) an act or acts of violence by one or more persons part of an assemblage…which act or acts shall constitute a clear and present danger of, or shall result in, damage or injury to the property of any other person or to the person of any other individual or (2) a threat or threats of the commission of an act or acts of violence by one or more persons part of an assemblage….”

A formal riot requires a public official to make a proclamation calling it so. Additionally, events can evolve. Temporally, if the stated purpose is deemed to have changed between initial assemblage and entry into the Capitol, the determination of the nature of the event could change, and coverage could be impacted accordingly.

Review of language at various points before, throughout, and after the day—including at specific times of damage and injury—will be critical to assessing intent. An actor’s or group of actors’ purpose can evolve. Language by both participants and authorities will ultimately influence coverage adjudication.    

What about the definition of “insurrection”? A policy’s war exclusion typically includes the terms “insurrection,” “rebellion,” or “revolution.” A seminal case on the interpretation of “insurrection” is Home Ins. Co. v. Davila 212 F.2d 731 (1st Cir. 1954). Here, the appellate court held that invocation of the exclusion would require facts that a movement accompanied by action specifically intended to overthrow the constituted government and to take possession of the inherent powers thereof. Therefore, the various individuals and groups that attended the protest would need to fit these elements for the exclusion to apply.

Presidential invocation of the Insurrection Act of 1807 for riots has not necessarily triggered coverage exclusions, as the term “insurrection” is contained within a broader exclusion (war, war and military action, etc.). Thus, application of the exclusion is usually judged by the words around “insurrection” in the exclusion, and not given the broadest possible meaning.

Black’s Law Dictionary notes an insurrection is distinguished from riot “by the fact that, in an insurrection, there is an organized and armed uprising against authority or operations of government.” The initial non-violent intent of individual participants may differ from the later-evolving violent protests.      

Terrorism exclusions have been assessed relative to various events for several years, too. Certification of an act of terrorism under the Terrorism Risk Insurance Act is made by the Secretary of the U.S. Department of Treasury, in consultation with the U.S. attorney general and the secretary of homeland security, and is subject to a reasonable timeline. There is no federal crime of domestic terrorism that does not have a transnational nexus. An ultimate review may include the evolving suggestion of foreign involvement in some aspects of the Jan. 6, 2021 events.

Where Are We At?

Various charges are being brought against individuals from various states, including uttering threatening language, engaging in disorderly or disruptive conduct with the intent to impede a session of Congress, knowingly entering or remaining in any restricted building or grounds without lawful authority, making interstate threats, possession of unregistered firearms, carrying a firearm and ammunition on the grounds of the U.S. Capitol building, and other charges. 

Whether facts will result in charges against a particular organization, or group of organizations, as to their predominant purpose remains to be determined. Whether facts will show a differentiation of purpose between the gathering during protest speeches and the entry into the Capitol will also be considered.

Finally, there will be the “hijack” issue. Specifically, was a peaceful group participating in a protest or rally later hijacked by an unrelated group with the intent to incite confrontation, violence, and physical damage? As the investigation continues, we have observed hijack issues in many cities across the country where peaceful groups supporting social-justice reforms were joined by others who had the sole intent of inciting violence and looting businesses.

Language and facts of involvement and intent can lead to differing coverage results. Definitions of pertinent language, unity-of-purpose review, temporal aspects of that purpose, and appropriate authority for any declarations will be important elements in ultimate coverage assessments.

Coverage Considerations

Coverage considerations are expansive in any broad-based situation such as what took place on Jan. 6, 2021. There is an interplay of self-insurance and private-insurance policies; potential invocation of excess policies that may be following form or providing drop-down coverage for losses excluded by primary; specialized coverage endorsements; and potential priority of coverage debates for concurrently responsive policies.

First-party damage to the building and premises and personal property is evident. Government and private insurance may respond depending on ownership and coverage grants. Insurers may seek to transfer the risk for incurred losses via various mechanisms.

With respect to non-government-affected entities, hospitality businesses had cancelled reservations for subsequent, related events, such as the Presidential inauguration, due to safety and loss concerns. These entities may present business interruption or mitigation expense claims, contending broader coverage interpretations similar to the arguments seen in COVID-19 litigation. Issues will include language around civil authority provisions, loss-of-use provisions, and whether the attendant underlying direct-loss coverage peril is triggered. And, as we have seen with COVID-19 cases, courts across the country do not always agree with each other when resolving these issues.

Additional coverage considerations involve workers’ compensation coverage. For injuries or death of responding officers after that date, presumptive claims are considered, although the nexus to events may remain subject to review. For multi-state National Guard responses, coverage priority may be reviewed.

Yet another twist in the criminal investigation and identification of individuals involved is the implication of liability coverage. Intentional acts and criminal acts are likely not covered, but any assessment is fact-dependent.

For example, if “John” was part of the crowd, entered the Capitol building, and was photographed in a crowd that was seen damaging the building, one question will be whether John actually intended to damage the building, or if he was simply part of the crowd and was unwittingly pushed into the building when the crowd surged through the doors.

Another example is “Jane,” who is an active social media voice and perhaps one who issued a rallying cry via a post but did not actually suggest violence or destructive action. An argument can be made that Jane may have been negligent or irresponsible, yet her actions may not implicate the intentional or criminal acts exclusions.

What’s Next?

As with any insurance investigation, coverage or otherwise, facts govern the ultimate  determination. The fact-finding process can be fairly expedient when a single entity and continuity of actions are involved. When various individuals or groups are involved in the matter at hand and the loss event evolves, the fact-finding process expands. Determinations around how this event is labeled, adjudicated, and how coverage language ultimately responds to its various claims will become clear as the various pertinent facts develop.

Much of the settled interpretation of responsive policy language has involved unified fact patterns, individuals, and stated purpose. Fact finding will ultimately determine if this event is considered diffuse as to individual purposes, or whether, over the course of the day, it is deemed to have become a unified event. Language used, by both participants and those governing and with authority, to label the event; and how the language comports with other determined facts will be integral to coverage determinations. As we have seen in past cases, the policy language considered will be mirrored in various coverage lines.

Eventually, as we have seen with prior events that presented unique coverage adjudication matters, the determinations may lead to further review and revision of existing policy language to clarify policy intent. 

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About The Authors
Multiple Contributors
William F. Knowles

William F. Knowles is a member at Cozen O’Connor.wknowles@cozen.com

Kelly Hopper Moore

Kelly Hopper Moore, CPCU, is the claims department manager for the state of Oregon. kellyghopper@yahoo.com

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