Insurance Academy

Halloween and Legal Liability for Ghosts, Ghouls, Goblins, and Other “Guests”

By | October 30, 2015

“Halloween pranks.” Google this phrase and more than 5 million results link to a myriad of ways to “mess with peoples mind” on Halloween. Some recommended pranks require a higher education to understand; some ideas are, well, strange; but some pranks are meant to do one thing – scare people (mainly kids). When kids and adults get scared, they do strange things, sometimes they get hurt, and sometimes they hurt someone else.

This article is not intended to take away the pranksters’ “fun;” this is but a review of the legal liability placed on those who set out to scare those little candy beggars. Even if you (or your clients) don’t intend to scare or “trick” the neighborhood kids, could legal liability for any injury occurring on your property exist because of your (or your client’s) “relationship” with the trick-or-treaters?

Legal liability is liability imposed by the courts through common law or by statute on any person or entity responsible for the financial injury or damage suffered by another person, group, or entity. If you (or one of your insureds) are found legally liable for an injury, does the homeowners’ policy cover the loss?

The following paragraphs address and answer two questions already presented in these opening paragraphs:

  1. How is legal liability created?
  2. Does the liability section of the homeowners’ policy provide coverage for legal liability arising out of Halloween-related pranks?

How Does a “Person” Become Legally Liable?

Before jumping into this legal liability discussion, note that “legal liability” and “negligence” are not synonymous; a person can be negligent without being legally liable, but he cannot be legally liable unless he is first negligent (except in strict liability where negligence is presumed). Too often these terms are improperly applied interchangeably; legal liability has a much higher threshold than negligence.

Now knowing that there is a difference between negligence and legal liability, how does a person become legally liable for injury or damage? Three tests must be satisfied for legal liability to exist:

  1. The person (this includes “natural” and “legal” persons) must be found guilty of negligent conduct. Negligent conduct arises out of:
    1. A duty to act or not act; and
    2. A breach of that duty;
  2. The injured party must suffer actual, quantifiable loss or damage; and
  3. The negligent conduct must be the actual cause of the injury or damage.

The following paragraphs detail each test.

What Creates Negligent Conduct (Negligence)?

Negligent conduct (referred to as “negligence” from this point forward) is failure to act or behave as a reasonably prudent person would act in the same situation. The two main parts or “tests” of negligence are: 1) duty owed; and 2) breach of the duty owed.

Proving negligence as the first step towards ultimately proving legal liability revolves around duty. If no duty is owed there is no negligence, and without negligence there is and can be no legal liability.

Is a Duty Owed?

Establishing whether there is a “duty owed” is generally a question of fact decided in a court of law on a case-by-case basis; however, the general principles of duty owed are somewhat static. Six tests are applied to establish the presence of a duty owed in an effort to ultimately prove negligence; the tests are:

  1. Was the harm foreseeable? This serves as the prime question in establishing a duty owed. Essentially, could a reasonable and prudent person foresee the potential harm caused by his conduct or decision? If harm can or should be reasonably foreseen, then a duty is owed. Is it reasonable to assume that jumping out of the shadows dressed in a scary costume might scare a child and cause him to hurt himself or others?
  2. What was the degree of certainty the harm would result? The risk of harm might be very low or it might be very high; and the greater the probability of harm, the greater the duty owed.
  3. What was the proximity between the conduct and the resulting harm? Did the guy have a heart attack right then or later that evening? Proximity and “proximate cause” are detailed later in this article.
  4. Is there a need to deter this type of conduct in the future? Some acts or decisions are viewed as detrimental to the public (but such acts do not reach the level of a crime). The more detrimental an act or decision is to society, the greater the duty owed or created. “Reasonable” Halloween pranks are generally not harmful to the public at large.
  5. Is there a burden placed on the community as a whole if liability is imposed on those who engage in this type of conduct? If everyone is forced to live up to a specific duty or standard, what might the result be? Would the duty be overbearing and impossible to meet?
  6. How easy is it to avoid this kind of conduct? The easier it is to avoid the conduct, the greater the duty. Conversely, if the action is necessary or cannot be avoided, the less likely a duty is owed. You don’t HAVE to scare the kids.

Once duty is established, the injured party must prove there was a breach of the established duty. Without a breach of duty, there is no negligence.

Breach of Duty! Violating the Degree of Care Owed!

Concluding that a duty owed was breached hinges on the degree of care the injured party should reasonably expect. The degree of care owed a particular party is based on the relationship between the tortfeasor (the wrongdoer) and the injured party. Beyond a relationship basis, statutes sometimes prescribe a specific degree of care owed. The greater the degree of care required or expected, the lower the threshold for breaching a duty owed (it is easier to breach a duty when greater care is required).

Degrees of care are presented in terms of the negligence “level” required to establish breach. For example, the term “slight negligence” means that the tortfeasor owes the injured party a high degree of care. Thus the tortfeasor need only slightly breach his duty to be found negligent. The four degree of care “levels” are:

  • Slight Negligence: A high degree of care is required. If the tortfeasor is not extra careful, the duty is breached. For example, those who carry passengers for a fee owe a high degree of care to their riders.
  • Ordinary Negligence: Requires “reasonable” care such as would be provided by a reasonable and prudent person. Invitees into a home or business are expected to be provided with reasonable care such as a warning about known or knowable hazards and protecting their guests from hazards that cannot be fixed or avoided.
  • Gross Negligence: Very little care beyond slight care (not to be confused with slight negligence) is required. To violate this degree of care and thus a breach a duty owed, the tortfeasor must act egregiously. For example, trespassers are owed on very slight care – the property owner is held liable only if they are egregious in their actions; essentially, the property owner is forbidden from setting a trap for a trespasser.
  • Negligence per se: A breach of duty because the law says it is. Negligence per se requires the: 1) at-fault party to violate the law; 2) law to pertain to public safety; 3) violation of the law be the cause of the injury; and 4) injured person be a part of the class of persons the law was designed to protect.

When the porch light is on, trick-or-treaters are considered invitees; the homeowner is inviting them onto the property (though not for a mutual benefit). Because of this relationship, the homeowner owes the treat seekers the level of “reasonable” care described under Ordinary Negligence.

Even if the homeowner is not planning on scaring the kids, he/she must warn about the loose brick or cracked sidewalk, fix the hazard or protect the invitees from unrepairable hazards.

If the porch light is off, the same level of care is not required. The homeowner has not invited the kids onto his property to get candy. To breach a duty to what are now trespassers the homeowner must be grossly negligent. However, since kids are involved, the duty of care may fall in between Ordinary Negligence and Gross Negligence.

Duty and Breach Confirmed

Depending on the facts surrounding the injury, the homeowner intending to prank the kids or fails to protect the kids from known hazards may have breached his duty owed. If such breach does occur, the homeowner has taken the first step towards being found legally liable.

Damages

If negligence is proven, the second requirement towards proving legal liability is actual damages. Did the injured party suffered actual damages? Remember, insurance responds to financial loss only, so these damages must be couched in monetary terms.

Monetary damages are divided into two broad categories: 1) compensatory damages; and 2) punitive damages. Compensatory damages are further sub-classed as either special damages or general damages.

A detailed discussion of damages is unnecessary at this point. Simply, if the child, teenager or adult is injured (either as a result of a prank gone wrong or the failure to protect from a hazard), and there are damages such as medical bills and/or pain and suffering as a result, the homeowner has breached the second requirement towards being held legally liable for any injury. Only one more test to satisfy towards a finding of legal liability.

Determining Causation of and Ultimate Liability for a Tort

Once negligence and actual damages are proved, the last step towards establishing insurable legal liability is determining whether or not the act is the actual cause of the harm. Several legal theories combine to judge causation and establish legal liability; these are: cause in fact; proximate or legal cause; and intervening acts and/or superseding events.

Cause in Fact

The basic premise of the cause in fact rule is: “without the actions of the supposed at-fault party there would be no injury or damage.” The inverse question is, “If the wrongdoer’s act or omission is eliminated, would the injury or damage have occurred anyway?”

To qualify as the cause in fact there must be a reasonable relationship between the breach of duty and the injury; the mere fact that a condition, action, or event qualifying as a breach of duty exists or occurs is not sufficient to satisfy the cause in fact requirement. In essence, the act or omission must precede the injury or damage, and there must be an unbroken chain of events between the act/omission and the injury.

Once the wrongdoer’s act is established as the cause in fact, the injured party must prove that this initial act is proximately close enough to the injury to qualify as the legal cause of the harm. Clearly, then, cause in fact and “proximate cause” are not synonymous. Proximate cause holds a different meaning with different legal qualifications. Acceptable terms usable in place of cause in fact are “but for” and, in Latin, “sine qua non.”

Proximate or Legal Cause

Proximate or “legal” cause is the legal theory applied to an action to limit the scope of the wrongdoer’s liability for injury arising out of the cause in fact. Proximate cause applies when there is no question that the injury or damage would not have occurred but for the actions or inactions of the wrongdoer (the cause in fact); but a question exists regarding whether the resulting harm is proximately close enough to the initial event in geography and time such that any punishment or consequences laid upon or charged to the at-fault party are fair and just.

For the cause in fact to qualify as the legal cause (the other name for proximate cause), there must be foreseeability and reasonable proximity. Foreseeability requires proof that the injury or damage could or should have been reasonably anticipated by the wrongdoer. The concept of reasonable proximity requires the injury or damage to not be so far removed from the act, geographically and in time, as to make punishment unreasonable.

To example the concepts of “cause in fact” and “proximate/legal cause,” consider the prank featured on nearly every home video show – the scarecrow with the candy bowl. For this prank the homeowner dresses like a scarecrow and sits motionless on the front porch with a candy bowl in his lap. When the kid reaches into the bowl, the scarecrow-clad man lurches towards the kid and says, “Boo” or “Gotcha” or whatever.

Inevitably the kid screams and jumps (sometimes hitting the scarecrow). This is the intended reaction; but what if the child falls down the steps and knocks his teeth out or breaks an arm. The actions of the homeowner in this case are likely to be considered the cause in fact and the proximate/legal cause of the child’s injury.

  • Cause in Fact: Remove the actions of the homeowner and the child would not have jumped and fallen down the steps;
  • Proximate/Legal Cause: 1) It is reasonable to assume such a reaction even though the injury was not intended; and 2) the injury was almost immediate.

Intervening Acts and Superseding Events

Intervening acts and superseding events relate directly to the determination of the cause in fact and proximate cause. An intervening act is one that is or should be reasonably foreseeable and thus does not relieve the original wrongdoer of his liability for the injury. In fact, the intervening act may actually be part of the chain of events leading to injury or damage. Conversely, a superseding event breaks the chain of causation or is not reasonably foreseeable, and is, itself, able to cause the resulting injury. Intervening acts are simply one more part of the ultimate injury while superseding events relieve the original wrongdoer of liability for any injury or damage following such an event.

Unless the prank is a “long tail” prank (exploding candy or some other act that may not be discovered for several days) these concepts don’t apply to this discussion. More detail on the concepts of intervening act and superseding event is available in the book, “Insurance, Risk & Risk Management.”

Legal Liability Found

Remember, three requirements are required to be held legally liable: 1) negligent conduct; 2) actual damages; and 3) the negligent conduct must be the cause of the injury. When all three tests are met, the person (“natural,” “unnatural” (since this is a Halloween piece) or legal) is considered legally liable for the injury and must pay the costs of all damages.

Does the homeowner pay these costs out of pocket or is coverage available from the liability section of the homeowners’ policy? The answer, once again, depends on the facts of the injury.

Legal Liability and the Homeowners’ Policy

Section II of Insurance Services Office’s (ISO’s) unendorsed homeowners’ policy extends coverage for Personal Liability (Coverage E) and Medical Payments to Others (Coverage F). Coverage E pays only when the insured is found legally liable (as detailed above) where Coverage F does not require the insured to be legal liable for coverage to exist.

Coverage E – Personal Liability

Coverage E’s insuring agreement reads, in part: “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.”

If the insured is found legally liable for injury arising out of a prank, Coverage E’s insuring agreement extends coverage. However, the insuring agreement is the broadest the protection is ever going to be, the policy’s exclusions must be reviewed before making a coverage determination on a Halloween prank gone wrong.

Coverage F – Medical Payments to Others

ISO’s Coverage F insuring agreement begins: “We will pay the necessary medical expenses that are incurred or medically ascertained within three years from the date of an accident causing ‘bodily injury.'” But the insuring agreement goes on to state: “This coverage does not apply to you or regular residents of your household except ‘residence employees.'” As to others, this coverage applies only: 1.To a person on the ‘insured location’ with the permission of an ‘insured.’

Coverage F applies because when the porch light is shining the trick-or-treaters are invitees and on the insured location with permission. Turn off the porch light and permission is no longer granted – Coverage F may no longer apply.

Expected or Intended Injury

Only one exclusion found in the unendorsed homeowners’ policy, applying to both Coverage E and Coverage F, appears to hold the possibility of removing coverage for injury to a prank victim: Section II Exclusions – E.1. Expected or Intended Injury. This exclusion reads, in part: “Coverages E and F do not apply to the following: 1. Expected Or Intended Injury ‘Bodily injury’ or ‘property damage’ which is expected or intended by an ‘insured’….”

Neither the prankster nor the homeowner failing to warn of a hazard expects or intends to cause bodily injury to a trick-or-treater. Yes, the prankster expected and intended for the children (or even adults) to scream and jump, but not to fall down the steps or experience any other harm.

Thus, Exclusion “E.1.” does not initially appear to remove coverage provided by either Coverage E or Coverage F for a Halloween prank. But even this interpretation is subject to the facts of the prank. In general, this exclusion does not apply to pranks intended to scare the neighbors.

The short answer to the second question posed by this article – “yes,” the homeowners’ policy does cover the cost of an injury arising out of a Halloween prank under both Coverage E and Coverage F. But this “yes” has limitations: 1) the policy/coverage part limits; and 2) the expectation of or intent to injure.

Have fun. Stay safe, and don’t… aaaaaaahhhh! (Help me.)

About Christopher J. Boggs

Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA, CWCA, CRIS, AINS, is a veteran insurance educator. He is Executive Director, Big I Virtual University of the Independent Insurance Agents and Brokers of America. He can be reached at chris.boggs@iiaba.net. More from Christopher J. Boggs

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