A court in North Carolina USA found that the insurers of a gym did not have to cover two underlying lawsuits resulting from a former employee allegedly videotaping female patrons undressing in a tanning bed. The claim was excluded by the sexual and/or physical abuse exclusion.

The court held that the sexual and physical abuse exclusion in the policy defined injury as including mental abuse. The claims in the underlying suits were the textbook definition of mental abuse. The injuries alleged from surreptitious videoing on 120 occasions by the employee fell squarely within the common, ordinary, and unambiguous definition of mental abuse.

Mental abuse should be part of any sexual and physical abuse exclusion.

(Scottsdale Insurance Co. v B&G Fitness Center Inc et al., case number 4:14-cv-00187)