Product consumer class action litigation has become a way of life in America. Hair conditioner that causes hair loss,  sunscreen labeled as having a sun protection factor (SPF) of 50+ but provides only 25 SPF, leaky windows, candy sold in boxes that are disproportionate to the volume of candy they contain, Subway “Footlong” sandwiches that measure only 11 inches, and “leakproof” sippy cups that leak, for example, have all been the subjects of recent class action lawsuits. Consumers have pursued these and many other class actions with varying degrees of success, and the defendants in each of these cases (or their insurers) likely had to spend significant amounts of money in legal expenses to reach a resolution.
Most product manufacturers purchase commercial general liability (CGL) insurance to avoid the costs of (1) defending product liability actions and (2) paying damages or a settlement to an underlying tort claimant. CGL policies cover these costs with two separate protections: (1) the duty to defend potentially covered suits (i.e., claims alleging accidental and unexpected bodily injury or property damage during the policy period) and (2) the duty to indemnify the insured for covered damages (i.e., damages due to accidental and unexpected bodily injury or property damage during the policy period). When an underlying lawsuit is brought by a single claimant alleging bodily injury or property damage caused by the insured’s product, there is rarely any dispute that the product manufacturer’s CGL insurer must defend and indemnify the insured. But what about a consumer class action against the product manufacturer?