The U.S. Court of Appeals for the Fourth Circuit held that if allegations in an underlying lawsuit are that publications were made during the policy period that differ in substance from those published before the policy’s inception, the “prior publication” exclusion does not excuse an insurer’s duty to defend. Pa. Nat’l Mut. Ins. Co. v. Beach Mart, Inc., 932 F.3d 268 (4th Cir. 2019).

A party asserted a trademark infringement claim against the insured, and the insured tendered the claim to its insurer, which then sought a declaration that it did not have a duty to defend based on an exclusion precluding coverage for injuries “[a]rising out of oral or written publication of material whose first publication took place before the beginning of the period.” The court held that because the claim was supported by allegations contending that the insured’s “offensive conduct began outside the coverage period” and continued “overtime without any meaningful interruption,” the “prior publication” exclusion precluded coverage.

the Fourth Circuit held that, under North Carolina law, a “prior publication” exclusion “bars coverage of an insured’s continuous or repeated publication of substantially the same offending material previously published at a point of time before a policy incepts.” Accordingly, it held that it would not bar coverage for publications made during the policy period that differ in substance from those published before commencement of coverage.