{"id":900744,"date":"2023-01-12T11:30:00","date_gmt":"2023-01-12T18:30:00","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900744"},"modified":"2023-01-11T11:37:27","modified_gmt":"2023-01-11T18:37:27","slug":"duty-to-defend-cant-flush-away","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/duty-to-defend-cant-flush-away\/","title":{"rendered":"Insurer Can\u2019t Flush Away Its Duty to Defend"},"content":{"rendered":"\n<p>S. Alice Weeks and Lawrence J. Bracken II | <a href=\"https:\/\/www.huntoninsurancerecoveryblog.com\/2023\/01\/articles\/third-party\/insurer-cant-flush-away-its-duty-to-defend\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Hunton Andrews Kurth<\/a><\/p>\n\n\n\n<p>In a recent opinion, the Northern District Court of Illinois reaffirmed the bedrock principle that an insurer\u2019s <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/duty-to-defend-additional-insured\/\" target=\"_blank\" rel=\"noreferrer noopener\">duty to defend<\/a> is broad and triggered by any allegations in a complaint that potentially fall within a policy\u2019s coverage grant.\u00a0 In\u00a0<em>Harleysville Pref. Ins. Co. v. Dude Products Inc., et. al.<\/em>, Case No. 21-c-5249 (N.D. Ill. Dec. 21, 2022), the insured, Dude Products, Inc., sought coverage from its insurer, Harleysville Preferred Insurance Company, against a class action lawsuit that alleged Dude Products intentionally and falsely marketed its wipes as \u201cflushable\u201d even though the product allegedly did not break apart and caused \u201cclogs and other sewage damage.\u201d\u00a0<\/p>\n\n\n\n<p>Harleysville had issued a commercial general liability policy and umbrella liability policy to Dude Products, which provided coverage for \u201cproperty damage\u201d caused by an \u201coccurrence\u201d during the policy period.&nbsp; The policies also contained exclusions for \u201cexpected or intended injury,\u201d which precluded coverage for property damage that is expected or intended from the standpoint of the insured, and for \u201cdamage to impaired property not physically injured\u201d which arises from a defect or dangerous condition in the insured\u2019s product. Harleysville filed a declaratory judgment action seeking a determination that it did not have a duty to defend or indemnify Dude Products under the CGL or umbrella policy.&nbsp; Harleysville argued, among other things, that there was no \u201coccurrence\u201d because the class action complaint contained allegations of intentional misrepresentation, there were no allegations of \u201cproperty damage,\u201d and the \u201cexpected or intended injury\u201d and \u201cimpaired property\u201d exclusions would apply to preclude coverage.&nbsp;<\/p>\n\n\n\n<p>The court noted that \u201c[u]nder Illinois law . . . an insurance company\u2019s \u2018duty to defend under a liability insurance policy is so fundamental an obligation that a breach of that duty constitutes a repudiation of the contract.\u2019\u201d&nbsp; The court then analyzed the allegations in the class action complaint, noting that while the plaintiffs did not use the specific term \u201cproperty damage,\u201d there were factual allegations that encompassed property damage, including the allegations of injury in the form of \u201cclogs or other sewage damage.\u201d &nbsp;Using the same line of reasoning, the court found the class action complaint also alleged an \u201coccurrence,\u201d as under Illinois law, \u201cdamage to something other than the [insured\u2019s product] itself does constitute an \u2018occurrence[.]\u2019\u201d There were no allegations Dude Products intended the sort of damage its products caused and there was no causal connection between Dude Product\u2019s alleged intentional misrepresentation as to the use of its product and the actual property damage caused by its product. &nbsp;For the same reasons, the court rejected Harleysville\u2019s argument that the \u201cexpected or intended injury\u201d exclusion applied.&nbsp; Finally, the court explained that the \u201cimpaired property\u201d exclusion does not apply to third-party property that is physically damaged, such as the alleged damage to the putative class\u2019s sewage systems.&nbsp; Harleysville\u2019s duty to defend therefore was triggered.&nbsp;<\/p>\n\n\n\n<p><em>Harleysville\u00a0<\/em>reaffirms that in most jurisdictions, an insurer\u2019s duty to defend is broad and an insurer cannot flush away the fundamental obligation to defend its insured.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>S. Alice Weeks and Lawrence J. Bracken II | Hunton Andrews Kurth In a recent opinion, the Northern District Court of Illinois reaffirmed the bedrock principle that an insurer\u2019s duty to defend is broad and triggered by any allegations in a complaint that potentially fall within a policy\u2019s coverage grant.\u00a0 In\u00a0Harleysville Pref. Ins. Co. v.&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/duty-to-defend-cant-flush-away\/\">Continue reading <span class=\"screen-reader-text\">Insurer Can\u2019t Flush Away Its Duty to Defend<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10],"tags":[9895,57,6647,22],"class_list":["post-900744","post","type-post","status-publish","format-standard","hentry","category-duty-to-defend","tag-advise-consult","tag-duty-to-defend-2","tag-illinois","tag-insurance","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Insurer Can\u2019t Flush Away Its Duty to Defend - Advise &amp; 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