The United States Court of Appeals For the First Circuit has affirmed a lower court's ruling that found that an insurer has a duty to defend Electricity Maine against a class action suit alleging Electricity Maine had engaged in misconduct that resulted in customers receiving higher bills than Electricity Maine had represented that they would be.

The policy provides that the insurer has a duty to defend Electricity Maine against any lawsuit that seeks damages for "bodily injury" caused by an "occurrence" and that the complaint in the underlying action fails to allege that Electricity Maine engaged in conduct that qualifies as an "occurrence" or that caused any "bodily injury."

"Electricity Maine acknowledges that the complaint does not allege that its conduct caused 'bodily injury.' The company contends, however, that Harlor makes clear that the complaint need not do so to trigger Zurich's duty to defend. We agree," the Court said

The Court noted that the complaint in the underlying class action sets forth a number of claims for intentional torts, but also includes a claim for "negligence" and a claim for "negligent misrepresentation."

"The negligence and negligent misrepresentation claims would appear to seek recovery for the kind of conduct that fits comfortably within the definition of an 'accident,' as these claims require proof only of 'event[s] that take[] place without one's forethought or expectation,'" the Court said

"None of this is to deny that one might doubt whether, in the context of this case, the alleged negligence is of a type that could cause distress that would result in bodily injury. But, the Law Court has made clear that, for purposes of Maine insurance law, where 'general allegations for the particular claims asserted in the underlying complaint . . . could potentially support an award of covered damages for bodily injury caused by emotional distress,' the duty to defend exists," the Court said

See further details in the Court's opinion

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