Nationwide not obligated to cover employment bias
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A Nationwide Mutual Insurance Co. unit is not obligated to provide discrimination coverage to a maintenance company under an exclusion in its coverage, a federal appeals court said Tuesday, in affirming a lower court ruling.
Overland Park, Missouri-based Columbia Maintenance Co., which had been sued for alleged employee discrimination, sought coverage from its insurer, Nationwide unit AMCO Insurance Co., according to the ruling by the 8th U.S. Circuit Court of Appeals in St. Louis in AMCO Insurance Co.; Depositors Insurance Co. v. Columbia Maintenance Co.; MK Maintenance, LLC et al.
Nationwide filed suit in U.S. District Court in St. Louis seeking a declaration it had no duty to defend or indemnify Columbia in the litigation. The district court ruled in the insurer’s favor and was affirmed by a unanimous three-judge appeals court panel.
Nationwide’s coverage expressly covers “personal and advertising injury,” which includes “discrimination,” but also contains an exclusion for employment-related acts such as discrimination, the ruling said.
“Despite this straightforward interpretation, Columbia believes the policy is ambiguous and should be constructed in its favor,” the brief ruling said. “The problem is that the two provisions are not ‘inconsistent’ much less ‘irreconcilable,’” it said.
“Like many policies, this one contains a broad grant of coverage followed by exclusions that narrow the range of covered risks,” it said. “It simply grants coverage for discrimination claims in one provision, and then excludes a subset of them in another, which is exactly how exclusions work,” the ruling said, in affirming the lower court’s judgment.
Attorneys in the case did not respond to requests for comment.
In December, a federal appeals court affirmed a lower court ruling and held AMCO was not obligated to defend a former restaurant owner in litigation filed by former employees under an employment-related practice exclusion in his coverage.
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