“Business Pursuits” Coverage Exclusion
The insurer sought in a declaratory judgment action that it had no duty to defend Stranczek, the insured under a PAK II policy and the mayor of the Village of Crestwood, in a number of underlying lawsuits, alleging that the Village had supplied contaminated drinking water based on a “business pursuits” coverage exclusion. The main issue on appeal was whether his position as mayor fell within the business pursuits exclusion.
Straczek’s primary income was from his work in two trucking companies. He worked only part-time as the mayor, and he received between $1,000 and $6,000 a year as salary for that work. Stranczek never retained any of his salary, but donated to local charities or the Village. The court found that, nevertheless, Straczek’s position fell into the business pursuits exclusion. Case law has defined a business pursuit as a “continuous or regular activity, done for the purpose of returning a profit.” The court held that, as mayor, he was engaged in an “occupation” because he was elected as the governmental leader of a town who performed numerous official acts in that capacity, it was on a “continuous and regular” basis because he was mayor for 38 years, and the position satisfied the profit requirement because he was paid yearly for the job, regardless of whether he gave that salary away or had a primary income from another position. The court also noted that PAK II policies are clearly intended to cover liability arising from personal risks that are taken anywhere in the world by the insured, and they do not insure against occupational or business-related risks.
Metropolitan Property and Cas. Ins. Co. v. Stranczek, 2012 WL 1108413, —N.E.2d —- (Ill.App. 1 Dist., 2012), No. 1-10-3760.
