The Texas Supreme Court In Evanston Ins. Co. v. Legacy of Life, Inc. Narrows Coverage For Mental Anguish

The Texas Supreme Court recently narrowed mental anguish coverage under insurance policies in Evanston Ins. Co. v. Legacy of Life, Inc. In Evanston, a family member of an organ donor learned that the organ donor charity was actually making money off of the donated organs and sued the charity for mental anguish. The organ donor charity demanded a defense and the insurance company denied coverage. The policy covering the charity covered “personal injuries”. In Texas, personal injury damages include damages for mental anguish. The charity sued their insurance company based upon their understanding that the policy covered the alleged personal injuries. The Texas Supreme Court held that the insurance policy provision providing coverage for a “personal injury” did not include coverage for mental anguish unless the mental anguish was related to physical damage or a disease of the claimants’ body. Since the family member that brought the original claim had not sustained personal physical damage no coverage was provided.

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