Exclusion for Injury on Public Owned Property Applied

By Barry Zalma on February 25, 2026

Neither Defense nor Indemnity Available Because of Exclusion

Post number 5293

Security at Low Income Housing to Risky for Insurer

See the video at https://rumble.com/v767jv4-exclusion-for-injury-on-public-owned-property-applied.html and at https://youtu.be/iORBwITjMhE

In Everest Indemnity Insurance Company v. Kates Detective & Security Services Agency, Inc., et al., No. 25 C 5488, United States District Court, N.D. Illinois, Eastern Division (February 18, 2026) dealt with a clear and unambiguous exclusion.

Facts

Everest Indemnity Insurance Company sued Kates Detective & Security Services Agency, Inc. and the Chicago Housing Authority (CHA) seeking a declaratory judgment regarding its obligations under an insurance policy.

CHA had requested security services for various facilities, and Kates responded, ultimately entering into a Security Services agreement in August 2022. Kates had purchased a Commercial General Liability policy from Everest, covering the period from May 1, 2022, to May 1, 2023.

In October 2023, a wrongful death lawsuit was filed against CHA and Kates, alleging failure to provide adequate security at the Lincoln Perry Apartments, which resulted in Mae Brown’s death.

The CGL provision stated in relevant part that the policy does not apply to “bodily injury” arising out of designated operations, including “[a]ny and all work involving low income housing, government owned and/or subsidized housing, HUD housing, and Section 8 housing.” The death occurred on a property like those government housing described in the exclusion.

The Errors & Omissions endorsement excludes “bodily injury,” and therefore the wrongful death lawsuit, because of an exclusion for bodily injury.

Law

The central legal issue concerned was whether Everest is obligated to defend or indemnify Kates and CHA under the terms of the insurance policy. The policy covers bodily injury or property damage caused by an occurrence but is subject to certain exclusions.

Discussion

Everest and CHA filed cross-motions for summary judgment. The court examined the insurance policy language and the underlying facts from the wrongful death lawsuit. The court found that the facts alleged in the wrongful death complaint did not trigger Everest’s duty to defend or indemnify under the terms of the policy, due to the specific coverage requirements and exclusions.

Analysis

The court granted Everest’s motion for summary judgment and denied CHA’s motion. The analysis emphasized the interpretation of the insurance contract and the applicability of its provisions to the facts of the wrongful death case. The court concluded that Everest had no obligation to defend or indemnify Kates or CHA, as the events in question did not fall within the policy’s scope of coverage.

ZALMA OPINION

Much to the surprise of many, liability insurance does not cover every possible fortuitous bodily injury or property damage caused by an insured. They do not. The security company took on the security at government owned property which poses a significant risk of loss for a security company, so Everest excluded the major risk proving unwilling to take on that risk. Kates and CHA must defend themselves without the assistance of an insurer.

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