{"id":905629,"date":"2026-05-05T15:55:30","date_gmt":"2026-05-05T21:55:30","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=905629"},"modified":"2026-05-05T15:55:32","modified_gmt":"2026-05-05T21:55:32","slug":"tortious-interference-claim-contract-exclusion-doesnt-apply","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/tortious-interference-claim-contract-exclusion-doesnt-apply\/","title":{"rendered":"Contract Exclusion Does Not Apply to Claim of Tortious Interference with Third-Party Contract"},"content":{"rendered":"\n<p>Kelsey Hunt | <a href=\"https:\/\/www.executivesummaryblog.com\/contract-exclusion-does-not-apply-to-claim-of-tortious-interference-with-third-party-contract\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Wiley Rein<\/a><\/p>\n\n\n\n<p>The United States District Court for the Northern District of Illinois, applying Illinois law, held that a contract exclusion did not bar coverage for a claim for <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/tortious-interference-improper-means-exception\/\">tortious interference<\/a> with contract because the insured\u2019s liability did not arise \u201cunder the terms of\u201d a contract.\u00a0<a href=\"https:\/\/www.executivesummaryblog.com\/assets\/htmldocuments\/Metropolis%20Condominium%20Assoc..pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><em>The Cincinnati Ins. Co. v. Metropolis Condo. Ass\u2019n.<\/em>, 2026 WL 891864 (N.D. Ill. March 31, 2026)<\/a>.<\/p>\n\n\n\n<p>The insured entity served as the homeowners\u2019 association for a high-rise building. In that capacity, it executed a management agreement with a unionized company retained to operate the building\u2019s parking garage. The management agreement obligated the insured to pay the management company\u2019s operating expenses, including fringe benefits owed by the company to its unionized employees. During the term of the agreement, the insured allegedly directed the management company to eliminate all fringe benefit payments to its unionized employees. When the union refused to release the management company from the terms of its collective bargaining agreement, the insured allegedly directed the management company\u2019s founder to start a new non-union company to perform the same work, which it did. Pursuant to the insured\u2019s alleged instructions, the original management company ceased making contributions to the union, which ultimately sued the insured for breach of contract (of the management agreement) and tortious interference (with the collective bargaining agreement). The insured sought defense and indemnity coverage under the D&amp;O liability coverage part of its policy, which the insurer denied based on the policy\u2019s contract exclusion.<\/p>\n\n\n\n<p>Although the insured effectively acknowledged that coverage for the breach of contract claim was barred by virtue of the policy\u2019s contract exclusion\u2014which precluded coverage for \u201cany claim for . . . alleged liability of any insureds under the terms . . . of any . . . contract\u201d\u2014it argued that the exclusion did not bar coverage for the tortious interference claim, and the insurer thus had a duty to defend the entire lawsuit. In the ensuing coverage litigation, the court agreed with the insured.<\/p>\n\n\n\n<p>According to the court, the insured\u2019s alleged liability for tortious interference did not derive from liability \u201cunder the terms of\u201d any contract\u2014neither the management agreement nor the collective bargaining agreement. Rather, in the court\u2019s view, the insured allegedly had induced the unionized company to breach its collective bargaining agreement, to which the insured was a stranger and under which it had no rights or obligations. The court rejected the insurer\u2019s argument that the two claims\u2014one for breach of contract and the other for tortious interference with contract\u2014were based on the same conduct. According to the court, the breach of contract count arose from the insured\u2019s actions under the management agreement between itself and the management company, whereas the tortious interference with contract count arose from the insured\u2019s actions \u201cthat are a step removed from\u201d the collective bargaining agreement between the management company and the union. Accordingly, the tortious interference with contract theory of liability did not fall within the policy\u2019s contract exclusion, and the insurer had a duty to defend the entire suit.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>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 801.641.8304, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kelsey Hunt | Wiley Rein The United States District Court for the Northern District of Illinois, applying Illinois law, held that a contract exclusion did not bar coverage for a claim for tortious interference with contract because the insured\u2019s liability did not arise \u201cunder the terms of\u201d a contract.\u00a0The Cincinnati Ins. Co. v. Metropolis Condo.&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/tortious-interference-claim-contract-exclusion-doesnt-apply\/\">Continue reading <span class=\"screen-reader-text\">Contract Exclusion Does Not Apply to Claim of Tortious Interference with Third-Party Contract<\/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":[9,10721],"tags":[9895,224,22,11750],"class_list":["post-905629","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-insurance","tag-advise-consult","tag-construction-contract","tag-insurance","tag-tortious-interference","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>Contract Exclusion Does Not Apply to Claim of Tortious Interference with Third-Party Contract - Advise &amp; 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