A 911 dispatch center is not necessarily part of a county’s emergency services department and is not covered by a secondary liability insurance policy, a federal appeals court found this week in a decision that will cost Travelers several million dollars.

The court opinion highlights how local government structure can affect insurance coverage and underscores the liability that emergency dispatchers hold when fielding calls from residents in the midst of a crisis. And like many consequential insurance lawsuits, the outcome was determined in large part by the rules of the English language and the wording of the policies.

The case is The Travelers Indemnity Co. vs. American Alternative Insurance Co. Travelers wrote a general liability policy for Surry County, North Carolina. American Alternative, a Munich Re subsidiary, wrote separate liability coverage for the county’s emergency services department. Both policies provided $1 million in primary coverage and millions more in excess coverage.

In 2019, a fire broke out at an apartment complex in Dobson, not far from Mt. Airy, North Carolina. A trapped resident in a second-floor apartment called 911 and asked if she should “bust the window” to let the smoke out. The 911 dispatcher for the county advised her to leave it closed, fearing more breeze would fan the flames.

As smoke filled the apartment, the caller and three others died from smoke inhalation, the 4^th U.S. Circuit Court of Appeals explained in the April 8 opinion. The residents’ estates sued Surry County and the 911 dispatchers, claiming negligence.

At the county’s insistence, the court said, Travelers settled the suits and paid the county’s general liability policy limits – $9 million altogether. Travelers then sued American Alternative, seeking at least a 50% contribution for the loss.

American Alternative argued that it owed no coverage since its policy covered only the Surry County Emergency Services department – not the 911 dispatch center. A federal district court judge found that American Alternative policy provided primary coverage of $1 million for the dispatchers’ advice and alleged negligence, but nothing on the excess coverage.

Travelers and American Alternative both appealed.

The 4^th Circuit appellate panel overturned the lower court, noting that Travelers’ attorneys’ argument had reached too far. The insurers’ lawyers had contended that the American Alternative policy covered the emergency services department and its “incidental operations.” The 911 call center should be considered an incidental operation of the emergency department, attorneys with the Hedrick Gardner law firm argued.

The appeals court judges disagreed, noting that the policy covered incident operations, yes – but only those operations incidental of the emergency services.

“The preposition ‘of,’ which introduces the prepositional phrase, functions ‘to indicate belonging or a possessive relationship,’” the appeals court opinion explained. “Thus, as used here, ‘of’ indicates that the listed services belong to or are in a possessive relationship with Emergency Services.”

Those incidentals may include refueling fire trucks, restocking ambulances, or retrieving a dog from a well or a cat from a tree, the court noted.

“The key is that Emergency Services employees are performing or supervising each of those tasks,” the judges wrote. “Its employees, by contrast, did not field the 911 calls that formed the basis for liability here, so AAIC’s policy did not cover that liability.”

Attorneys for Travelers and American Alternative could not be reached for comment Wednesday.

The outcome of the appeal may not apply nationwide. In some jurisdictions, 911 centers are considered part of emergency services departments. In many others, the call centers are separate departments, according to the National Association of State 911 Administrators. The association does not keep track of dispatchers or departments that have been sued for alleged negligence or advice to callers. Some jurisdictions allow criminal charges to be brought against dispatchers, an official said.

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