In the case of Nash Street, LLC v. Main Street America Assurance Co., SDV was victorious in its appeal of a trial court decision granting summary judgment in favor of the insurance company (Main Street) finding that policy exclusions (“k(5) and k(6)” (often known as j(5) and j(6) under standard form commercial general liability policies) barred coverage for plaintiff’s claim. The Connecticut Supreme Court reversed the finding of the trial court, concluding that the scope and application of exclusions k(5) and k(6) were not settled under Connecticut law and were subject to diverging opinions in other jurisdictions, therefore creating an uncertainty that triggered Main Street’s broad duty to defend. “[W]hen there is a split of authority in other jurisdictions as to the meaning of a particular policy provision, and no appellate authority in the relevant jurisdiction has opined on the matter, the uncertainty as to how a court might interpret the policy gives rise to the duty to defend.” In so holding, the Court further noted that the narrow construction that is to be given to policy exclusions in most jurisdictions, including Connecticut, should have prompted the insurer to provide a defense. “Faced with a lack of any Connecticut appellate authority on point and with numerous state supreme and federal appellate court cases that have adopted interpretations of exclusions k (5) and (6) that are consistent with Connecticut law and would favor the plaintiff, the defendant was presented with a legal uncertainty with regard to its duty to defend. Because such an uncertainty works in favor of providing a defense to an insured, exclusions k (5) and (6) did not relieve the defendant of its duty to defend ...” The case is a great result for policyholders in Connecticut and elsewhere. It may give pause to carriers that would otherwise contemplate denying a defense to their insureds in cases where the application of an exclusion is less than certain.
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