In a recent decision, a so-called "Failure to Disclose" exclusion in a liability insurance policy read as follows:
¶19 The 2014 Policy contained a “Failure to Disclose” exclusion that barred coverage for “‘bodily injury’ or ‘property damage’ arising out of your failure, intentionally or unintentionally, to disclose information regarding the sale or transfer of real or personal property.” The Underlying Complaint made eight claims against Van Sickle.
Huckins v. United Serv's Auto. Ass'n, ___ Mont. ___, 396 P.3d 121, ¶ 19 at 125, 2017 MT 143 (2017).
The issue before the Court was the carrier's duty to defend under that particular homeowner's policy. The Court compared the policy to the allegations in the underlining complaint against the insured. That comparison precluded any duty to defend any of the claims alleged in the underlying case:
Each allegation in the Underlying Complaint is premised upon Van Sickle's alleged failure to provide information regarding the 2011 flood or general flood conditions in the area to Huckins. As such, the exclusion must apply and “there exists an unequivocal demonstration that the claim against an insured does not fall within the insurance policy's coverage.” [Citation omitted.] Therefore, as to this policy, USAA had no duty to defend Van Sickle.
Huckins v. United Serv's Auto. Ass'n, ___ Mont. ___, 396 P.3d 121, ¶ 20 at 125-26, 2017 MT 143 (2017).
The Court accordingly held that, under that particular homeowner's policy, there was no duty to defend any of the claims alleged in the underlying case.
Comparing unambiguous exclusions to unambiguous allegations. That is a sure way to decide whether or not there is a duty to defend.
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