Equitable Lawsuits Under The Consumer Protection Acts May Not Provide a Defense In a CGL policy For Businesses.
In determining whether or not an insurance company has the legal duty to provide coverage to its insured for the defense of a lawsuit, the insurance company must look to the allegations contained in the plaintiff’s complaint and compare the allegations to the relevant coverage provisions of the insurance policy.
If the complaint alleges facts within or potentially within the policy’s coverage provisions, the insurance company has a duty to provide coverage to its insured for the defense cost of the lawsuit.
A policy provides coverage for damages because of “ bodily Injury” or property damage” caused by an “occurrence.”
Equitable relief, including declaratory judgment and injunction, does not constitute damages for the purpose of the policy. If the complaint seeks a declaratory judgment and injunction, the complaint does not seek damages. Therefore, the policy does not provide indemnification related to the same.
If the complaint does not assert “Bodily Injury, ” the policy does not provide coverage.
Further, the policy requires that any alleged “bodily” or property damage” be caused by an “occurrence. ” The policy defines an “occurrence,” in relevant part, as an accident.” If the complaint alleges a violation of a Consumer Protection Act for failing to complete the work and failing to perform modification to a project and did not provide proper expertise to complete the job professionally, that would be intentional acts. Intentional acts are not “occurrence,” If the complaint does not assert an “ occurrence” as required by the policy, this is not covered. If the complaint is seeking damages for completing the unfinished work using a board-certified licensed professional, the damages being sought are not an “ occurrence or property damage as defined by the policy. And, to the extent they might be viewed as such, the exclusion for work and work product would take away any coverage for damages.
In General, if the complaint does not seek damages for “bodily injury” or “property damage” caused by an occurrence,” the policy would not generally provide a defense or indemnity relative to the lawsuit under the Consumer Protection Act.
ICC Is a Third Party Administrator that investigates coverage questions for Business, Insurance companies, and municipalities nationwide.
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