Every day, class actions are commenced on behalf of consumers against manufacturers, retailers, financial institutions and service providers. Some companies assume that such cases are not covered by their insurance because class actions must be crafted to address issues common to all of the plaintiffs and therefore tend not to seek monetary damages that are covered by liability insurance.

That skepticism is understandable because many, or even most, consumer class actions seek only relief that is not covered, such as damages for defective products failing to perform as intended or to punish for deceptive practices barred by consumer protection statutes. However, all class action complaints should be read carefully for any covered claims, bearing in mind that most companies have coverage under their general liability policies not only for third-party property damage and bodily injury but also for personal and advertising injury.

Policyholders may also have coverage for a variety of "wrongful acts" under directors and officers (D&O), errors and omissions (E&O), and employment practices liability policies. Further, invasion of privacy claims may be covered personal injury under general liability policies, covered under cyber policies, or in cyber coverage found in other types of policies. Most importantly, even when a class action complaint does not clearly contain covered allegations, it will frequently assert claims that are potentially covered, and that's all that's needed to trigger valuable defense coverage.

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