James River should defend Alabama fireworks firm – Enterprise Insurance

A federal appeals court on Thursday upheld a lower court ruling requiring James River Insurance Co. to defend an Alabama fireworks company in a lawsuit that resulted from an accident that killed two workers and seriously injured a third.

James River agreed to defend Owens Cross, Ultratec Special Effects Inc., based in Alabama, and other defendants in the underlying litigation relating to the 2015 accident, subject to a reservation of title, pursuant to the judgment in James River Insurance Co. v . Ultratec Special Effects Inc. et al.

Ultratec Special Effects unit Ultratec HSV had received the James River Police and both companies, as well as an Ultratec Special Effects employee and an affiliate, are defendants in the underlying litigation.

An appeals court with three judges ruled that an “exclusion of employer's liability”, which states that insurance cover is excluded if employees fulfill obligations, “in connection with the management of an insured person” was ambiguous.

"James River argues that the exclusion clearly applies equally to all policyholders," the verdict said.

"Defendants respond that the exclusion is ambiguous, as the expression 'any insured person' could also be interpreted to apply only to the employee's claims against his employer Ultratec HSV," but "does not apply to coverage for claims that an Ultratec HSV employee charges against another insured person ”. who is not your employer. "

"Since Ultratec (Special Effects) is being sued by employees of another insured person rather than his own, defendants have a duty to defend James River in the underlying lawsuit."

"The exclusion is ambiguous under Alabama law because it is relatively open to either interpretation," the panel said. "We have to interpret the ambiguous provision in favor of coverage," said the confirmation of the ruling by the US District Court in Birmingham.

The district court has not ruled whether James River also has an indemnity, as it was not ripe for a decision until liability in the underlying litigation was established.

Lawyers in the case had no comments or did not respond to requests for comment.

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