In a non-precedential but yet informative and helpful decision the Superior Court of Pennsylvania in Lipsky v. State Farm Mutual Automobile Insurance Company, upheld a Trial Court and ruled broadly that the definition of “bodily injury” in State Farm’s policy allowed for claims to include negligent infliction of emotional distress. The Appellate Court did so on a different basis than the Trial Court by finding that the definition of bodily injury was ultimately broad enough to include emotional harm without physical injury. The Superior Court said “nothing in the language of the State Farm policy departs from the common law understanding that the injury contemplated in such a negligent infliction of emotional distress claim results not from the bodily injury suffered by the accident victim, but from the claimant’s witnessing the accident from nearby.” The relevant part of the policy defines bodily injury as “bodily injury to a person and sickness, disease or death which results from it.”  

These critical coverage issues arose as a result of an October 7, 2006 incident wherein Joseph White, while intoxicated was driving his wife’s car with her permission when he then struck and killed a 17 year old pedestrian, Benjamin Lipsky in the presence of Benjamin’s father and two brothers.

The lesson learned here is when interpreting an insurance contract, one must carefully look at the intent of the parties as manifested by the terms in the policy.   If there is any term which is ambiguous, the policy must be construed in favor of the insured to further the purpose of the indemnification, or benefits, to be provided by the insurer.  That has been well settled law in Pennsylvania and was more recently discussed at length by the Superior Court in Telecommunications Network Design v. Brethren Mut. Ins. Co., 5 A.3d 331 (Pa. Super. 2010).   The Courts in Pennsylvania also more recently stated that they continue to accept that physical injury and physical impact are not synonymous terms (see Schmidt v. Boardman Co., 11 A.3d 924 (2011) in a case addressing bystander emotional distress claims).  The Superior Court critically held that to the extent State Farm, in this situation, argued that a physical impact is necessary for a “bodily injury to a person”, had no basis in either prevailing law or the language of its own policy.