A federal court in Virginia recently held that an insurer had a duty to defend its insured against allegations of defamation, finding that an exclusion for “personal and advertising injury” committed by an insured “whose business is … publishing” is ambiguous. State Farm Fire and Cas. Co. v. Franklin Center for Government and Public Integrity, 2014 WL 1365758 (E.D. Va. Apr. 4, 2014).
The insured was sued for defamation after posting critical articles on its website. Its insurer sought a declaration that it had no duty to defend based on, inter alia, an exclusion which precluded coverage for personal and advertising injury committed by an insured “whose business is … publishing.” On the parties’ cross-motions for summary judgment, the court held that the insurer had a duty to defend the insured. It rejected the insurer’s argument that the exclusion for “personal and advertising injury” committed by an insured “whose business is … publishing” applied, even though the insured conceded that its activities included “publishing” news articles on its website. The court found that the term “publishing” could have more than one reasonable meaning, ranging from a traditional enterprise engaged in the production and sale of hard copy informational texts to a group (like the insured) who only post information content on a website to promote organizational purposes. The court found that the exclusion did not unambiguously apply to the claims asserted against the insured.