Legal malpractice insurer had no duty to defend law firm based on business enterprise exclusion

by Christopher J. Graham and Joseph P. Kelly

American Zurich Ins. Co. v. Wilcox and Christopoulus, LLC, et al, Case No. 1-12-0402 (Ill. App. Ct. 1st Dist. Jan. 17, 2013)

Insurer filed suit against insured lawyer and law firm seeking a declaration of no duty to defend. Trial court found no duty to defend lawyer but found a duty to defend the law firm. On appeal, insurer claims it has no duty to defend the law firm because of its “business enterprise” exclusion which provides that there’s no coverage for any claim arising out of “the alleged acts or omissions of any insured * * * for a business enterprise * * * in which any insured has a controlling interest.” Appellate court noted that the underlying complaint against the lawyer and the law firm for civil conspiracy involved allegations of the lawyer’s acts for a business enterprise in which the lawyer had a controlling interest. Appellate court found no duty to defend the law firm because the exclusion above precluded coverage for the law firm because the exclusion applied to all insureds based on the conduct of “any” one insured.

Category: Professional Liability Insurance Digest Comment »

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