Insurance Coverage for Class Action Claims: Recovery for Indemnity and Defense Costs

While many class action claims, especially consumer class actions, seek nonmonetary relief not generally covered by business liability insurance policies, do not presume these policies will not provide coverage.

The complaint may reveal one or more claims that trigger coverage for third-party property damage and bodily injury or for personal and advertising injury. Various “wrongful acts” under D&O, E&O and EPLI policies may also trigger coverage. Privacy claims may be covered as personal injury under CGL policies.

Any complaint that contains potentially covered allegations will trigger valuable defense coverage. The insurer may be required to pay defense costs only for those potentially covered claims, or it may be able to later recoup defense costs associated with noncovered claims.

An insurer that agrees to defend may also be willing to contribute to the settlement of a class action simply to close out its obligations early in the litigation.

Listen as our authoritative panel of insurance practitioners looks at the availability of insurance coverage for class action claims. The panel will discuss how to analyze a complaint for potential coverage and for part of the claims that trigger a defense. The program will also discuss the insurer’s perspective on coverage and arguments to deny or limit coverage.

1. Class claims likely to be covered under business liability policies
2. Class claims less likely to be covered under business liability policies
3. Determining duty to indemnify
4. Value of defense coverage

The panel will review these and other key issues:

• What types of complaint allegations may trigger coverage for third-party property damage and bodily injury or for personal and advertising injury?
• What types of complaint allegations may trigger coverage under D&O, E&O and EPLI policies?
• What is the value of defense coverage and what are the limitations to the insurer’s duty to defend?