Insurance Law

Dist. Ct. did not err in finding that three insurers of general contractor were responsible for paying $2.9 million settlement of claim brought by injured worker of subcontractor. Ct. noted that cross-liability exclusion contained in different umbrella policy, which excluded coverage for claims brought by any insured against another insured, precluded coverage where injured worker suffered bodily injuries, and where injured worker and general contractor were insureds under umbrella policy. Ct. rejected insurers’ argument that instant exclusion impermissibly made policy illusory by purporting to grant coverage for subcontractor’s indemnity obligations to general contractor, but then denying such coverage under language of exclusion.

Dist. Ct. did not err in granting defendant-insurance company's motion for summary judgment in action by plaintiff-insured seeking declaration that commercial general liability policy issued by defendant required defendant to represent plaintiff in underlying lawsuit alleging claims of patent infringement, slander of title as to ownership of said patents and unfair competition. Instant policy contained exclusion that prohibited coverage for disparagement of property, and underlying lawsuit alleged only disparagement of property claim, as opposed to implicit claim of defamation of character that would have been covered under policy.

In action by plaintiffs seeking declaration that defendant-insurance company was required to indemnify insured corporation and two of its directors as defendants in underlying action by five individuals (some of whom were former directors of said corporation) alleging fraud, civil conspiracy and violation of Illinois Consumer Fraud and Deceptive Practices Act, Dist. Ct. erred in granting defendant's motion to dismiss after finding that defendant had no duty to defend or indemnify any part of underlying lawsuit based on "insured vs. insured" exclusion where three of five plaintiffs in underlying action, as former directors of corporation, were also "insureds" under applicable policy. While defendant was not required to defend or indemnify claims by insured plaintiffs, defendant must defend and indemnify non-insured plaintiffs based on allocation clause in policy.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in action by plaintiff-insured alleging that defendant wrongfully refused tender of defense in underlying lawsuit as required by defendant’s comprehensive general liability policy where underlying lawsuit alleged that plaintiff breached construction contract. Defendant’s duty to defend under instant policy was only triggered if underlying complaint alleged damage to something other than structure itself, and underlying action alleged plaintiff’s deficiencies in materials, workmanship and building’s construction that concerned alleged damages only to building itself.