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Amerisure Mutual Insurance Co. v. Microplastics, Inc.

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ARGUED APRIL 21, 2010

Before CUDAHY, RIPPLE, and HAMILTON, Circuit Judges.

This case presents a recurring problem under Illinois insurance law governing an insurer’s duty to defend under a commercial general liability policy. Suppose a buyer sues a manufacturer for supplying defective products, but the buyer does not specify the elements of its claims for damages in the complaint. A commercial general liability policy is in-tended to cover, among other risks, the insured’s liability for accidental bodily injury and property damage caused by its defective products. The policy is not intended, however, to cover the costs of replacing or repairing the defective products themselves. The parties agree here that if the unhappy buyer alleges that the defective products have caused bodily injury or damage to property other than the defective products themselves, a commercial general liability policy will require the insurer to defend its insured. They also agree that if the unhappy buyer alleges only a claim for repair or replacement of the defective products, the policy will not require the insurer to defend what amounts to only a breach of contract claim against its insured.

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