The New Hampshire Supreme Court ruled that an insurer owed a duty to defend under a business liability policy in Broom v. Continental Casualty Co., No. 2004-869, 2005 WL 3051024 (N.H. Nov. 16, 2005).

 

The appellants were sued in their capacities as principals in Strategic Timbers Trust, Inc.. The suit was a result of a failed business transaction between Strategic Timbers Trust and certain plaintiffs who alleged that appellants slandered them to lenders and other parties to the transaction. The plaintiffs did not include a specific date in their suit stating when the disparagement occurred.

 

Appellants requested a defense for the suit from their business liability insurer, Interstate, which denied coverage on January 4, 2002. On an amended demand for arbitration filed on December 20, 2002 the underlying plaintiffs listed September 28, 1999, and April 27, 2000, as dates that disparagement occurred via memoranda distributed by appellants.

 

While the dates identified fell outside the policy's coverage period, the court said that “when the appellants made their December 6, 2001, request for a defense from Interstate, there existed a reasonable possibility that the underlying claim fell within the policy's coverage.”

 

Thus, the court concluded that, at the time a defense was requested, Interstate breached its duty by denying coverage.