June 7, 2024 – A Delaware court recently ruled in favor of a shooting range, finding that its insurance liability policy covers claims arising from the range’s rental of a firearm. The court disagreed with the defendant insurance company that a “Rental of Sporting Equipment Exclusion” was permissible grounds to deny coverage under the policy. The case arises from a customer’s suicide at the Noble Eagle range in Delaware. The customer rented a firearm from the shooting range and used it to commit suicide. The customer’s family subsequently filed a lawsuit against the shooting range, alleging claims for negligence, negligent entrustment, and negligent training and supervision. But when Noble Eagle submitted the claim to its insurance company, coverage was denied, meaning it would not even provide a defense, pursuant to a “Rental of Sporting Equipment Exclusion.” Noble Eagle filed suit against its insurer seeking an order requiring it to provide a defense and indemnify it in the lawsuit brought by the family.
The “Rental of Sporting Equipment Exclusion” of the insurance policy provided, in relevant part, “it is understood and agreed that this policy specifically excludes and does not extend to or provide coverage, indemnity, or defense costs for bodily injury or property damage arising out of the use of sporting equipment rented out by the insured.” Noble Eagle argued that the Exclusion was ambiguous because it did not define “sporting equipment” and, therefore, it is unclear whether it applied to rental firearms. The insurer argued that the provision was clear and unambiguous, and that the plain and ordinary definition of sporting equipment encompasses firearms. The court agreed with Noble Eagle that the provision was ambiguous, holding that it “cannot conclude all firearms are unequivocally and definitionally ‘sporting equipment.’” As such, the court granted summary judgment in favor of Noble Eagle and ordered the insurer to provide defense and indemnity for the claims alleged against Noble Eagle arising from the suicide.
This case is an important reminder to all firearm industry members to pay attention to and read all common insurance policy exclusions that could provide a basis for the denial of coverage. In addition to the Rental of Sporting Equipment Exclusion at issue in the Noble Eagle case, some other typical exclusions in insurance policies include the Assault and Battery Exclusion, the Violation-of-Law exclusion, and even a Liquor Liability Exclusion, which may apply to certain shooting clubs and ranges. All industry members should discuss these issues with their insurance brokers, read these exclusions and know the potential effects (what type of claim might be excluded). This case also teaches a valuable lesson that all is not lost if an insurer initially disclaims coverage for an occurrence. If you believe an insurance policy provides coverage despite a disclaimer, there is a viable path to obtain coverage through the courts. Every case is different and will likely turn on the factual circumstances at issue, but it is important to remember that, when there is ambiguity in an insurance policy, the language is generally construed against the insurance company.
Shooting ranges and dealers should also be mindful that they have a duty not to sell or rent firearms to patrons whom they know or should know are likely to use the firearm to harm themselves or others. Renzulli Law Firm consults with dealers and shooting ranges nationally on best practices to ensure that policies and practices are applied to exceed the standard of care and create a safer environment. In addition, the NSSF has partnered with the American Foundation for Suicide Prevention and they are a great resource for these issues.
Renzulli Law Firm continues to monitor firearm litigation across the United States. If you have any questions about firearm industry insurance policies, litigation, or best practices for a shooting range, please contact John F. Renzulli or Christopher Renzulli.