Shelton

BACKGROUND

A. The policy Exchange issued to plaintiffs a “Landlords Protector Package” policy covering the insured rental property located in Malibu, California, from January 16, 2010, to January 16, 2011 (policy). The policy included business liability coverage with a stated limit of $1 million for each occurrence. The policy provided, “We shall pay all damages from an occurrence which an insured is legally liable to pay because of bodily injury, personal injury, or property damage arising out of the ownership, maintenance, or use of the insured location covered by this policy. [¶] At our expense we shall defend an insured against any covered claim or suit.” An occurrence was defined as “a sudden event, including continuous or repeated exposure to the same condition, resulting in bodily injury or property damage neither expected nor intended by the insured. It also means an act or series of acts of the same or similar nature, resulting in personal injury.” Bodily injury was defined as “bodily harm, sickness or disease, including care, loss of

2 services and death resulting from the injury.” Property damage was defined as “physical injury to or destruction of tangible property…