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  • WisBar News
    October 09, 2013

    Enjoyment of Art (Water Fountain) Not “Consumption” for Insurance Purposes

    Oct. 9, 2013 – The enjoyment of a decorative water fountain in a hospital lobby was not considered “consumption,” a state appeals court has ruled, despite the water fountain builder’s best efforts to make that argument for purposes of insurance coverage.

    Five plaintiffs sued Aurora St. Luke’s South Shore Hospital, located in Cudahy, alleging that mist from Aurora’s bacteria-laden water fountain caused them to get sick with Legionnaire’s disease, a type of pneumonia caused by Legionella bacteria.

    Aurora filed a third-party complaint against Creative Business Interiors Inc. (CBI), which was hired to construct and install the fountain in Aurora’s lobby. CBI had two commercial general liability policies, so CBI’s insurers were joined in the suit.

    The liability policies contained “fungi or bacteria exclusions.” Under that exclusion, the policy did not cover bodily injury from ingestion or inhalation of fungi or bacteria on or within a building or structure. The parties agreed that this exclusion barred coverage.

    But, the policy also included an exception to the bacteria exclusion. That is, the “fungi or bacteria exclusion” did not apply to any fungi or bacteria “that are, are on, or are contained in, a good or product intended for consumption.”

    CBI argued that the water fountain was intended for people to “consume” its artistic qualities through observation and enjoyment. Thus, the “consumption exception” applied, CBI argued, and its insurance policies covered any injuries sustained.

    But in Aurora Healthcare Inc. v. Creative Business Interiors, 2012AP2469 (Oct. 8, 2013), a three-judge panel for the District I Court of Appeals disagreed.

    “A reasonable insured reading the policy would understand the word ‘consumption’ to reference a good or product that was intended to be eaten or drank, or otherwise used up,” wrote Judge Kitty Brennan.

    “It makes little sense that a reference to consumption, when discussing exposure to fungi and bacteria, would be referring to the observation and enjoyment of art.”

    CBI had relied on cases from other states involving “consumption exceptions” in insurance policies covering hotels. In those cases, hotel patrons were exposed to bacteria in swimming pools, hot tubs, and shower/spa tubs.

    “In each case cited by CBI, the insured intended the water in the swimming pool or hot tub to be used by guests and guests were expected to have physical contact with the water, unlike the Fountain here,” Judge Kitty Brennan wrote. 

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