Products Liability Law Reporter

A federal district court held that a commercial general liability policy issued to an electronic cigarette store did not cover injuries suffered by a customer when a battery he purchased from the store exploded in his pocket.

Here, Adam Williams purchased a battery from electronic cigarette store Aqueous Vapor LLC. He was allegedly injured when the battery exploded in his pocket while he was away from Aqueous Vapor’s premises. In subsequent litigation, Williams and Scottsdale Insurance Co., which issued a commercial general liability policy to Aqueous Vapor, moved for summary judgment.

Granting Scottsdale Insurance Co.’s motion and denying Williams’s motion, the district court noted that the insurance policy at issue here had several exclusions, including an endorsement for products-completed operations hazard, which excludes coverage for a bodily injury occurring away from Aqueous Vapor’s premises and arising out of its products or goods. The policy also contained an exclusion for tobacco or nicotine products, which excluded coverage for bodily injuries arising out of the consumption or use of any tobacco or nicotine product, including electronic cigarettes.

Citing Missouri state law, the court found that where policy language is unambiguous, a contract must be enforced as written. If policy language is ambiguous, it will be construed against the insurer, the court said. Nevertheless, the court noted, an insured cannot create ambiguity by claiming that a part of the policy implies a level of coverage greater than what the policy actually provides when read as a whole.
Applying these principles here, the court held that the policy’s products-completed exclusion precludes coverage under Aqueous Vapor’s unambiguous policy. Williams’s injuries occurred away from Aqueous Vapor’s premises and were caused by an exploding battery sold by Aqueous Vapor to Williams, the court found. The court also rejected Williams’s argument that applying the exclusion here would render coverage illusory. Citing case law, the court held that commercial general liability policies are not intended to guarantee the quality of an insured’s product or work.

Consequently, the court held that coverage was precluded under Aqueous Vapor’s policy and summary judgment for Scottsdale Insurance was warranted.

Citation: Scottsdale Ins. Co. v. Aqueous Vapor, LLC, 2021 WL 123401 (W.D. Mo. Jan. 12, 2021).