Duty to Defend Arises with “Occurrence”
In Insurance Corp. of Hanover v. Shelborne Associates, a class action complaint was filed against Shelborne Associates (“Shelborne”), alleging that Shelborne sent unsolicited fax advertisements to the class. The insurer, Insurance Corporation of Hanover (“ICH”), issued a general commercial liability policy to Shelborne. Shelborne tendered its defense to the insurer.
The insurer alleged that it had no duty to defend Shelborne because, under the policy, an “occurrence” is an accident and the complaint alleged intentional conduct. Shelborne asserted that it believed that its fax advertisements were authorized, even though the underlying complaint alleged that the fax advertisements were sent without authorization. The analysis as to whether there was an occurrence involved the question of whether the injury was expected or intended.
The court held that it was possible, under the complaint, that Shelborne was negligent in believing the subject fax advertisements were authorized and that the property damage was an occurrence which was not expected or intended. Thus, ICH had a duty to defend Shelborne in the underlying action.
Insurance Corp. of Hanover v. Shelborne Associates, 905 N.E. 2d 276 (Ill.App 1Dist., 2009).
