Phrase ‘Arising Out of’ in Policy Has Broad But Limited Meaning

Wednesday, September 16, 2026

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Phrase ‘Arising Out of’ in Policy Has Broad But Limited Meaning—Ninth Circuit

Panel Says Insurer Need Not Defend Based on New Allegations Against Ex-Insured Being Based on the Same Type of Negligence Asserted in Suits When Coverage Was in Effect

By a MetNews Staff Writer

The Ninth U.S. Circuit Court of Appeals has held that although the phrase “arising out of” in insurance policies has a broad connotation under California law, that language cannot be given so sweeping an interpretation as to render an insurer obliged to provide a defense in a suit alleging sexual assaults by the insured’s employee after the policy lapsed on the theory that previous attacks had occurred when coverage was in place.

A memorandum opinion, filed Monday, affirms a summary judgment in favor of the insurer, granted by District Court Judge Anne Hwang of the Central District of California.

USA Equestrian Trust, Inc. is seeking coverage by Old Republic Insurance Company in an action filed in Contra Costa Superior Court. The plaintiff, “Jane Doe,” claims she was twice sexually assaulted at a U.S. Pony Club training facility, when she a minor, by Gerald Bearden, a trainer, and asserts the defendant failed to provide protection against its employees.

The trust was named as a defendant on May 22, 2023, after coverage ended. However, two suits based on like allegations were brought within the policy period—one accusing trainer George Morris and the other identifying trainer Jimmy Williams as the attacker—and Old Republic provided a defense.

Clause in Policy

At issue is the breadth of a policy clause saying:

“All Claims arising out of the same Wrongful Act and all Interrelated Wrongful Acts shall be deemed to be one Claim for purposes of this Policy, and such Claim shall be deemed to be first made on the date the earliest of such Claims is first made against an Insured, regardless of whether such date is before or during the Policy Period.”

Monday’s opinion—signed by Circuit Judge Daniel P. Collins and Senior Circuit Judge Jay Bybee, and by Senior District Court Judge Gonzalo P. Curiel of the Southern District of California, sitting by designation—says, citing a 1999 opinion from California’s First District Court of Appeal:

“Under California law, the ‘arising out of’ language that appears in the single claim provision at issue does ‘not import any particular standard of causation or theory of liability’ but instead ‘connotes only a minimal causal connection or incidental relationship….But even a single claim provision with ‘arising out of’ language has its limits.”

‘Too Attenuated’

The judges declared:

“Here, material similarities between the underlying Bearden case and the prior cases concerning alleged conduct by Morris and Williams consist of the Trust’s alleged failure to enact policies to protect minors from sexual assault. But the mere absence of general organizational policies that may have prevented these different plaintiffs’ alleged harms—harms which involved different alleged actors acting at different tunes and in different locations—is too attenuated an overlap to reasonably construe the Bearden, Morris, and Williams actions as the same claim under the policy. The Bearden case cannot relate back to the prior suits, which Old Republic covered because they were brought within the policy period.”

The case is USA Equestrian Trust, Inc. v Old Republic Insurance Company, 25-1697.