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Insurer Files Cell Phone Coverage Lawsuits; AT&T Wireless Files Its Own Coverage
A trio of insurance coverage lawsuits related to cell phone personal injury litigation have been filed in recent weeks, Mealey Publications has learned.
Zurich-American Insurance Co. on July 23 filed actions in New York and Texas state courts seeking declaratory relief and contribution in connection with putative class actions involving cell phone claims.
Both Zurich-American actions are premised upon Audiovox Corp.'s and Nokia Inc.'s requests for coverage of putative class actions in New York, Georgia, Louisiana, Maryland and Pennsylvania by cell phone users against cell phone manufacturers, retailers and related service providers.
AT&T Wireless, also named in the underlying lawsuits, allegedly promoted and sold the cell phones. It seeks coverage from several insurance companies: Fireman's Fund Insurance Co.; Employers Insurance of Wausau; Travelers Property Casualty Insurance Co.; Travelers Casualty and Surety Co.; Federal Insurance Co.; The American Insurance Co.; ACE American Insurance Co.; International Insurance Co.; Greenwich Insurance Co.; Royal Insurance Co. of America; Insurance Company of North America; TIG Insurance Co. and National Surety Corp.
The underlying claimants allege that the cell phones are defective because they emit radio frequency radiation and implicate the industry in a conspiracy to withhold information as to the defects and failure to provide headsets for use in mitigating their exposure. The class actions further charge the insureds with knowledge of reasonable and economical methods to insulate cell phone users from exposure to the radiation. They charge the insureds with strict liability for the failure to warn and design/manufacturing defects, breach of implied warranties and fraud.
In its complaint filed in the New York County Supreme Court, Zurich seeks a declaration that it has no duty to defend or indemnify Audiovox Corp. against these suits.
Zurich also seeks a declaration as to the obligations of Audiovox's insurers, Royal Indemnity Co., National Surety Co., Vigilant Insurance Co. and St. Paul Cos. Should the court determine that Zurich owes defense or indemnification to or on behalf of Audiovox, Zurich seeks equitable contribution and subrogation from Audiovox and its insurers.
Zurich insured Audiovox under two primary general liability policies in effect from July 1998 to July 1999. The policies require Zurich to pay for "all sums" that Audiovox may become legally liable to pay "because of bodily injury and property damage" covered under the policies. The policies contain several exclusions relating to injury, the insured's product, impaired property and recall of products.
Zurich sued Nokia in the Dallas County District Court in Texas, seeking the same declaratory relief as in the New York action. Zurich also seeks a judgment against Nokia's insurers, Home Insurance Co., National Union Fire Insurance Co. of Pittsburgh, Pa. and Federal Insurance Co.
Zurich issued six primary general liability policies to Nokia for the periods from 1987 to 1988 and 1995 to March 2000. These policies also provide Nokia with "all sums" coverage; however, each policy contains varying definitions of "bodily injury," "property damage" and "occurrence." Certain exclusions pertaining to the insured's product, work, impaired property and product recall are also included in Nokia's policies.
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