Bodily Injury Must Actually Be Bodily Injury for the CGL to Apply
April 3, 2017
A Massachusetts district court determined last week that if damages for bodily injury are not claimed in CGL insurance policy claims, then allegations that the insureds made false and misleading claims in advertising the efficiency of their product is considered outside of the scope of coverage of the CGL policy. The case is Cincinnati Ins. Co. v. KT Health Holdings, LLC, Civil Action No. 16-11722-FDS (D. Mass. Mar. 27, 2017).
Cincinnati Insurance Company provides a commercial general liability (CGL) policy for KT Health Holdings, a company that manufactures and sells an athletic tape. The advertisements for the athletic tape claim that the tape relieves pain and prevents injury during physical exertion. KT tape was sued in a class action for misleading advertising, the plaintiffs claiming that the tape does not work as advertised, further alleging that the claims were not backed up by any scientific evidence and are not accepted by the medical community.
The policy issued by Cincinnati Insurance Company, like most other CGL policies, provides that the insurer will pay those sums the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which the insurance applies.
The insureds filed a claim under the policy for representation in the class action law suit. Cincinnati Ins. Co. argues that they owe no duty to defend against the class action because there are no claims for bodily injury and therefore the claim is outside of the scope of coverage provided by the CGL policy. The defendant contends that the claim itself implicates bodily injury because the advertising injury claims that are at issue concern the pain-relieving and injury preventing qualities of KT tape.
The complaint does not allege direct harm to the class of plaintiffs “because of bodily injury”; instead, the claims mainly deal with the economic harm of having to pay a higher price for something that did not work as advertised.
The federal district court of Massachusetts determined that the claims did not allege a bodily injury and therefore did not seek damages due to a bodily injury. Because of this, the court determined that there was no coverage in this case.
Editor's Note: The plaintiffs argued that since the product had to do with the health and safety of the users that the failure of that product to comply with those expectations should have amounted to a “bodily injury” as defined by the CGL policy. The court disagreed with that analysis and ultimately found for the insurance company, following the lead of several courts that have come before such as in the case HPF, L.L.C. v. Gen. Star. Indem. Co., 338 Ill. App. 3d. 912, 918 (2003).