"advertising injury" insurance exclusion doesn't exclude false advertising claims

Luxottica, Inc. v. Allianz Global Risks US Ins. Co., 2021 WL 4226197, No. 1:20-cv-698 (S.D. Ohio Jul. 28, 2021)

Mostly this case is about other things, but the court finds a duty to defend in the underlying false advertising case. Luxottica was sued in a class action alleging that its AccuFit system for prescription eyeglasses was falsely advertised as more accurate. Allianz ultimately declined to defend under its policies, and the court found it had a duty to defend.

In a less insured-favorable move, the court was also persuaded that the list of what was excluded by the phrase “personal and advertising injury” in the exclusions (relevantly, slander/disparagement/privacy violations/© infringement/use of another’s advertising “idea”) was significant. “This specialized definition does not include any injuries arising out of false advertising or deceptive business practices.” Here, that meant that exclusions for “personal and advertising injury” didn’t apply, but it also suggests that actual “advertising injury” coverage is narrower than many insureds would like. I would expect insurers to be more often quoting the statement that insurers “could have included such claims in this specific and exhaustive list.” Here, “the fact that these claims are not included in the ‘personal and advertising injury’ exclusions furthers Luxottica’s arguable claim that Allianz owes it a duty to defend in the Underlying Lawsuit,” but my guess is that insurers will benefit more from limitations on advertising injury coverage they do sell.