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.
