Royal Sun and Alliance Insurance has won a judgment against Chubb over the latter’s duty to defend an insured company, according to a Lexology report.
The insured, Canadian company Marc Anthony Cosmetics, was sued for trademark infringement. Marc Anthony notified Chubb, its primary liability insurer, of the litigation and asked to be defended.
However, Chubb took the position that it didn’t have a duty to defend, citing two exclusions in its policy that applied to intellectual property rights that were “intended by insured.” RSA, Marc Anthony’s umbrella insurer, assumed the company’s defence and ultimately settled the California claims, Lexology reported.
But RSA took the position that Chubb should have defended Marc Anthony, and filed litigation in Ontario seeking reimbursement of $6 million for defence costs.
Ontario Superior Court Justice W. Matheson found that the exclusions Chubb relied on didn’t apply in this case, as the California case included allegations of both intentional and unintentional conduct. Matheson also found that Chubb’s “Intellectual Property Laws or Rights” exclusion was broadly worded enough to potentially exclude coverage for any advertising injury.
Matheson ruled that “Chubb is or was obligated to defend Marc Anthony in the underlying U.S. complaint and to pay all of the defence costs incurred by Marc Anthony and the applicant in the underyling actions,” and that Chubb was obliged to reimburse RSA for the costs that company incurred in its defence of Marc Anthony.