Fireworks company loses appeal over injury coverage

An Axa XL unit does not have to defend or indemnify a fireworks company in connection with two incidents where volunteers were injured, a federal appeals court ruled Monday.

In 2018, two volunteers, Timothy Olson and Todd Zdroik, sustained injuries while volunteering at Fourth of July fireworks displays in the Wisconsin towns of Rib Lake and Land O’ Lakes, according to the ruling by the 7th U.S. Circuit Court of Appeals in Chicago in T.H.E. Insurance Co. v. Trey D. Olson, as special administrator of the estate of Timothy L. Olson, et al. Mr. Olson later died of unrelated causes.

Mr. Olson’s estate and Mr. Zdroik sued the fireworks distributor, Bellevue, Wisconsin-based Spielbauer Fireworks Co., in Wisconsin state court.

Spielbauer’s insurer, Axa XL unit T.H.E. Insurance Co., filed suit in U.S. District Court in Green Bay, seeking a declaration it had no duty to defend or indemnify the fireworks company based on a “Shooters Endorsement” exclusion in its general and excess liability policies.

The district court ruled in the insurer’s favor and was affirmed by the three-judge appeals court panel. The endorsement said the policy would not provide coverage for injuries or deaths “to shooters or their assistant hired to perform fireworks displays or any other persons assisting or aiding in the display of fireworks.”

The panel agreed with the district court that the reference to “any other persons “included volunteers. It “plainly and unambiguously creates two distinct groups excluded from coverage,” hired shooters and their assistants and the “large residual category” of “any other persons” who assist, the ruling said, in affirming the lower court.

The exclusion would not apply to volunteers if they were assisting hired shooters or hired assistants, as the plaintiffs contended, the ruling said, in affirming the lower court.

Attorneys in the case did not respond to requests for comment.