“advertising injury” insurance exclusion doesn’t exclude false advertising claims

Luxottica, Inc. v. Allianz Global Risks US Ins. Co., 2021 WL
4226197, No. 1:20-cv-698 (S.D. Ohio Jul. 28, 2021)

Mostly this case is about other things, but the court finds
a duty to defend in the underlying false advertising case. Luxottica was sued
in a class action alleging that its AccuFit system for prescription eyeglasses
was falsely advertised as more accurate. Allianz ultimately declined to defend
under its policies, and the court found it had a duty to defend.

In a less insured-favorable move, the court was also
persuaded that the list of what was excluded by the phrase “personal and
advertising injury” in the exclusions (relevantly,
slander/disparagement/privacy violations/© infringement/use of another’s
advertising “idea”) was significant. “This specialized definition does not
include any injuries arising out of false advertising or deceptive business
practices.” Here, that meant that exclusions for “personal and advertising
injury” didn’t apply, but it also suggests that actual “advertising injury”
coverage is narrower than many insureds would like. I would expect insurers to
be more often quoting the statement that insurers “could have included such
claims in this specific and exhaustive list.” Here, “the fact that these claims
are not included in the ‘personal and advertising injury’ exclusions furthers
Luxottica’s arguable claim that Allianz owes it a duty to defend in the
Underlying Lawsuit,” but my guess is that insurers will benefit more from
limitations on advertising injury coverage they do sell.

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