7th Cir.: Carrier Owed Coverage for Defense of 'Groundless' Claim

The U.S. 7th Circuit Court of Appeals last week, in a case of first impression, ruled that the excess liability insurance carrier for an Illinois employer had to reimburse an employer for the cost of defending and settling a "groundless lawsuit" by the widow of a former employee. Noting that the Safety National Casualty Corp. policy promised excess liability coverage for claims based on the violation of any "employers' liability laws," the court reasoned that the claim didn't need to be viable in order to give rise to the carrier's duty to provide coverage. The court also said the ...