During а divorce action between her parents, Tara N., a minor, was sexually assaulted by her father during a visitation period at the home of the father's parents. Tara and her mother, Donna N., brought this civil action against the parents and their homeowner's insurer, Economy Fire & Casualty Insurance Company, alleging that the parents had negligently failed to supervise the visitation. Tara sought damages for her physical and psychological injuries, and Donna sought damages for her derivative claims of loss of consortium, medical expenses for Tara's treatment and loss of earning capacity.
The issue on аppeal is whether Economy's policy covers the claims. We affirm the trial court's ruling that coverage was barred under the policy's sexual *82 assault exclusion provision. We therefore affirm the judgment dismissing the action against Economy. 1
Facts
Following the father's criminal conviction for the sexual assault, Tara and Donna commenced this action against the father's parents and Economy. The complaint alleges the following facts. Tara was born in 1986. Donna filed for divorce from Tara's father in December 1990. During the divorce proceedings, Donna suspected that her husband had been sexually abusing Tarа. As a result, Donna obtained an order from the family court directing that all visitations between Tara and her father be supervised by appropriate persons. The court designated the father's parents as appropriate supervisors of any visitations between Tara and her father.
The pаrents agreed to supervise a visitation between Tara and her father on August 14, 1991, and to be present at all times. During the visit, the parents failed to supervise the visitation and left Tara alone with her father, who subsequently sexually abused her. As a result, Tara suffered physical and psychological damages. The complaint alleged that the parents were negligent in their supervision of the father's visit with Tara.
Tara sought damages, inter alia, for her physical and psychological injuries and for her future medical and psychological treatment costs. Donna sought damages for her derivative claims, including the mediсal costs relating to Tara's past treatment, loss of earning capacity, and loss of Tara's consortium, society and companionship.
*83 Economy defended on the grounds that its policy did not provide coverage for Tara's and Donna's claims. Economy sought a summary judgment declaratory ruling, arguing that it had no duty to defend the father's parents because the policy specifically excluded coverage for bodily injury arising out of a sexual act which is "expected, anticipated, foreseeable or intended by an insured." 2
In making its ruling, the trial court first considered the coverage provisions of the policy, although Economy had not relied upon those provisions in denying coverage. The trial court determined that the provisions covered only bodily injury damages. Thus, the court held that Donna's derivative claims were barred since she had not suffered any bodily injury.
It is not clear to us, however, whethеr the trial court's bench decision was also addressing Tara's claim for psychological damage. 3 However, on appeal, Economy interprets the court's ruling as also covering this aspect of Tara's claim, and Economy defends the court's ruling on this basis. We therefore address the court's ruling оn the premise that the court was speaking to Tara's claim for psychological damage.
Despite our uncertainty regarding the foregoing point, it is clear that the trial court's coverage ruling did not bar Tara's bodily injury claim. Therefore, the court went on to address Economy's argument that the *84 sexuаl assault exclusion provisions of the policy barred coverage of all the claims asserted by both Tara and Donna. The court held that the policy excluded liability for bodily injury arising out of a sexual act. The court therefore dismissed Economy from the action. Tara and Donna appeal.
Discussion
Standard of Review
The trial court's grant of summary judgment presents an issue of law which we review de novo by applying the same methodology as the trial court.
See Taryn E.F. v. Joshua M.C.,
Herе, the facts are undisputed. Thus, the issue narrows to the interpretation of Economy's policy and the application of the policy to the undisputed facts. The interpretation of an insurance contract is a question of law for our independent review.
See Taryn E.F.,
Coverage Provisions 4
We begin with the coverage provisiоns of the Economy policy:
*85 COVERAGE E — Personal Liability
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, we will:
1. pay up to our limit of liability for the damages for which an insured is legally liable ....
In addition, thе policy defines "bodily injury" as "bodily harm, sickness or disease, including required care, loss of services and death that results."
Economy argues that this coverage provision clearly and unambiguously covers only Tara's bodily injury — not her psychological injury. The parties have not cited to any reported Wiscоnsin case which has determined whether the nonphysical damage claims of a person who has suffered physical injury are included within the concept of "bodily injury." 5 Nor has our own research uncovered such a case.
However, we find persuasive the reasoning of the Court of Appeal of Louisiana when it considered the *86 issue of whether bodily injury encompassed emotional harm:
We attach significance to the fact that the policy defines bodily injury to mean "sickness or disease" in the instant case. These broad terms must include mental distress which persists over a period of time and necessitates the taking of some medication and interferes with one's performance at work. In this regard, the policy . . . seеms to be broader than it would have been had that definition not included the words "sickness or disease."...
We are unable to separate a person's nerves and tensions from his [or her] body. It is common knowledge that worry and anxiety can and often do have a direct effect on other bodily functions.
Levy v. Duclaux,
We аlso note that in Wisconsin, bodily injury has been considered to be broader than physical injury, although not in situations directly considering the issue in this case. In
Acharya v. Carroll,
While the resolution of this issue has recеived varied treatment in different jurisdictions, we deem it more reasonable that the term "bodily injury" encompasses claims for emotional or psychological harm.
See State Farm Fire & Casualty Co. v. Pickard,
849 F.2d
*87
1220, 1221-22 (9th Cir. 1988) (comparing cases which have included nonphysical harm with those that have excluded such harm in construing "bodily injury" in an insurance policy).
See generally
Gregory G. Sarno, Annotation,
Hоmeowner’s Liability Insurance Coverage of Emotional Distress Allegedly Inflicted on Third Party by Insured,
Mental, emotional or psychological conditions are commonly considered as sickness or disease by both lay persons and medical professionals. Such conditions are routinely treated by medicаl personnel employing medical procedures. A reasonable insured would understand such conditions to be included within the concepts of "sickness or disease" which the policy uses to define "bodily injury."
See School Dist. of Shorewood v. Wausau Ins. Cos.,
Wе reject Economy's coverage argument on a further basis which impacts the claims of both Tara and Donna. The coverage provision is broken out into two segments. The first segment reads, "If a claim is made ... for damages because of bodily injury . .. ." (First emphasis added.) This clause does not require Economy to pay for bodily injury. Rather, it requires a bodily injury as a condition of Economy's coverage. This is a subtle, but important, distinction.
If this condition of coverage is satisfied, then the second segment of the provision comes into play. This segment recites Economy's payment obligation: "we will. . . pay up to our limit of liability for the damages for which an insured is legally liable." (Emphasis *88 added.) Notably, this segment does not limit Economy's оbligation to pay only bodily injury damages. Instead, it requires payment for all amounts (up to the limits of liability) for which "an insured is legally liable." This obviously would include all claims of the person who actually suffered the bodily injury and those derivative claims of third parties. Under the facts of this case, this would include all claims of both Tara and Donna.
The coverage clause at issue in this case is commonly included in liability insurance policies. We are to read insurance policies to further the insured's reasonable expectations of coverage while meeting the intent of both parties to the contract.
Benjamin v. Dohm,
For the same reasons, we conclude that our interpretation does not bind Economy to a risk which it did not contemplate and for which it did not receive a prеmium.
See Reznichek v. Grall,
For these collective reasons, we disagree with the trial court's construction of the policy's coverage provisions. We hold that Tara's claim for psychological *89 injury and Donna's derivative claims are covered by these provisions.
Exclusion Provisions
We now turn to the trial court's further ruling that the exclusion provisions of the policy preclude coverage in this case. This provision reads:
1. Coverage E — Personal Liability and Coverage F — Medical Payments to Others do not apply to bodily injury or property damage:
a. which is expected, anticipated, foreseeable or intended by any insured;
j. аrising out of any sexual act, including but not limited to molestation, incest or rape.
We will address this argument only in the context of Tara's claims because, if those claims are barred, it follows that Donna's derivative claims, although separate, are also barred. A derivative claim, although separate, depends on whether the party actually injured sustained a compensable injury.
See Utecht v. Steinagel,
Tara conсedes that the exclusion clause expressly bars coverage of her bodily injury claim. She argues, however, that because the clause is silent as to other *90 forms of injury, her claim for psychological harm is not barred. 6
However, we have already held in the preceding discussion that "bodily injury" as defined in thе policy is not limited to just physical bodily harm, but includes other conditions of sickness and disease, including psychological injury. Were we to adopt Tara's argument, we would impose a different definition of "bodily injury" for the exclusion provision of the policy from that which we have adopted for the covеrage portion of the policy.
We are mindful of the rule that an exclusionary clause in an insurance contract is strictly construed against the insurer.
See Just v. Land Reclamation, Ltd.,
The policy definition of "bodily injury" is generic to the entire policy. We properly apply that definition throughout the policy unless the context of the phrase in a particular provision calls for a different definition. We see nothing in the exclusion clause which expressly or inferentially suggests that the phrase "bodily injury" means something diffеrent than that which the policy assigns to it. 7
Tara's claims against Economy are therefore barred by the exclusion provisions of the policy. Since Donna's claims are derivative of, and dependent upon, the vitality of Tara's claims, her claims against Economy are also barred.
By the Court. — Judgment affirmed.
Notes
The action continues against the father's parents.
The trial court's ruling determined that the father was an insured under the policy because he was a resident of the parents' household. Economy does not quarrel with this ruling.
Tara's attorney attempted to clarify this point with the trial court at the conclusion of the hearing. Despite this attempt, we remain uncertain from our examination of the trial court's remarks whether it intended to include Tara's claim for psychological damage in its ruling.
Because our decision in this case ultimately rests on the meaning of "bodily injury" in the exclusion provisions rather than the coverage provisions of the policy, it may appear at first blush that we need not address the coverage provisions. However, as the ensuing discussion will reveal, our interpreta *85 tion of the meaning of "bodily injury" for purposes of the exclusion clause depends in large measure on the meaning we assign the phrase for purposes of the coverage clаuse. Therefore, this portion of our opinion is essential to our ratio decidendi and is not dicta.
Wisconsin has recognized that derivative claims of third parties such as loss of consortium and medical expense liability are not bodily injury for purposes of a limit of liability provision in an insurance policy.
Richie v. American Family Mat. Ins.
Co.,
Economy first argues that
Taryn E.F. v. Joshua M.C.,
Here, however, thе focus of the argument is on the reach of the phrase "bodily injury," not "any insured" as in Taryn. Thus, Tara does not dispute that her claim for bodily injury is excluded under Taryn. Instead, she contends that her claim for psychological injury is covered because it is not a "bodily injury." This is a different argument than that made in Taryn. Therefore, Taryn does not govern the issue.
In light of our holding that the exclusion provisions of the policy bar coverage, we need not address Economy's further argument that the principle of fortuitousness also bars coverage.
See Hagen v. Gulrud,