The United States District Court for the Eastern District of Virginia has recently held that an insurer must defend a lawsuit alleging defamation and other business torts stemming from a blog post on the insured’s website.   State Farm Fire and Casualty Co., v. Franklin Center for Gov’t & Public Integrity, Case No. 1:13-cv-957 (E.D. Va. Apr. 4, 2014).  On cross motions for summary judgment, the court held that the insurer was obligated to defend the insured.

The insured is a nonprofit that provides commentary on state and local politics from a free market and limited government perspective.  The underlying lawsuit alleged that two articles posted on the insured’s website defamed certain practices of then-gubernatorial candidate Terry McAuliffe’s car company, GreenTech Automotive, Inc.  The insured’s business liability policy provided coverage for “written publication[s] … that slander or libels a person or organization or disparages a person’s or organization’s goods, products or services.”  The court held that the underlying claims “squarely fall within coverage for ‘personal and advertising injury.’”

Having found that the allegations were within the policy’s coverage grant, the court turned to the potentially applicable policy exclusions.  First, the court found that the underlying allegations were not solely premised on the insured acting “knowingly.”  The policy excluded from coverage any act that knowingly would cause an advertising injury.  Although it was alleged the insured acted “with an intent to harm,” the court held that it was possible that the plaintiff may recover without proving an intent to harm or acting with knowledge.

Finally, and most significantly, the court considered the application of an advertising injury exclusion for the insured “whose business is: advertising, broadcasting, publishing or telecasting.”  The insured regularly posts news articles on its website for free.  The insurer claimed that this made the insured a “publisher.”  The court held that the term “publishing,” which the policy did not define, was at least ambiguous as to whether it exclusively meant a commercial business of selling books, magazines and other such materials.  As such, the court was required to construe the exclusion against the insurer, finding that the insured was not in the business of publishing.

The court, therefore, held that the policy obligated the insurer to defend the insured in the underlying action.  The court did not rule on whether the insurer was obligated to indemnify the insured for any resulting liability.