Defense Costs Limitations Under D&O Policies
Under an “Allocation” provision, D&O policies may expressly exclude defense cost reimbursement for uncovered portions of a claim or proportionately determine the amount of defense reimbursement between covered and uncovered aspects of a claim under an “Allocation” provision.
“Personal/Advertising Injury” Coverage for Antitrust Claims
“Personal and advertising injury” coverage, while unavailable for antitrust claims per se, may be implicated by other tortious claims asserted in those suits. The causes of action asserted in tandem with counts for unfair competition or tortious interference may trigger defense duties under one or more of the “personal and advertising injury” offenses. COMSAT Corp. v. St. Paul Mercury Ins. Co., 1998 U.S. Dist. LEXIS 2916, *14–15 (D. Minn. Mar. 6, 1998).
Equals “disparate or differential treatment”: Discrimination may be factually implicated by allegations of disparate economic treatment. Federal Ins. Co. v. Stroh Brewing Co., 127 F.3d 563, 568 (7th Cir. (Ind.) 1997) (coverage for undefined “discrimination” was sufficient to trigger defense for underlying case asserting “price discrimination”).
Common law unfair competition includes many varieties of conduct beyond “passing off.” It can encompass torts that in the process lessen equal competition in the market. Hewlett-Packard Co. v. CIGNA Property & Cas. Ins. Co., 1999 U.S. Dist. LEXIS 20655, *15–19 (N.D. Cal. Aug. 24, 1999) (“‘Unfair competition . . . can be found when the defendant engages in any conduct that amounts to a recognized tort and when that tort deprives the plaintiff of customers or other prospects.’”).
“Malicious Prosecution” refers to prosecutions begun in malice without probable cause to believe that the charges can be sustained. An action for damages is brought by a person against whom the action was instituted maliciously and without probable cause. The cause of action is initiated after termination of the prosecution of such suit in favor of person claiming damages. Ethicon, Inc. v. Aetna Casualty & Surety Co., 737 F. Supp. 1320, 1329 (S.D.N.Y. 1990) (underlying suit limited causes of action under the Sherman Act, but the court determined that indemnity was triggered as the “complaint alleged facts and claims that could be said to comprise a common law claim for malicious prosecution”).
In the 2001/2013/2017 ISO CGL Coverage B for “Personal Injury and Advertising Injury” are part of a combined definition that encompass any form of disparagement in an actionable publication causing injury. Liberty Mutual Ins. Co. v. OSI Indus., Inc., 831 N.E.2d 192, 199 (Ind. Ct. App. 2005) (insurer required to defend underlying action alleging violations of Illinois Consumer Fraud and Deceptive Business Practices Act because statements that questioned who had ownership rights to exclusive secret technology were disparaging).