Disparagement Allegations May Trigger Valuable Coverage
A recent case we handled highlights the importance of reading a complaint’s allegations very carefully. Competitors in high-stakes litigation may file complaints and cross-complaints against each other alleging a variety of intellectual property violations and business torts. These may include patent or copyright infringement, attempted monopolization, unfair competition and interference with contractual relations. On their face, none of these are likely to be covered by commercial insurance. But competitors often cannot resist alleging every conceivable harm, and this may include asserting that the defendant (or cross-defendant) has disparaged the plaintiff to customers and the public. Most general liability policies cover disparagement as part of the “personal and advertising injury” coverage. In California, the broad duty to defend results in valuable coverage for attorneys’ fees and costs in what would otherwise be uncovered litigation.
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