Great American wins case over advertising injury claim

A Great American Insurance Group unit does not have to indemnify a homebuilding services firm for a copyright settlement because the settlement agreement did not apportion the payment to losses covered and not covered under its commercial general liability insurance policy, a federal appeals court ruled Tuesday, affirming a lower court decision.

In 2013, Longwood, Florida-based Home Design Services Inc. filed litigation in Florida court stating Lakeland, Florida-based Highland Holdings Inc., a homebuilding services firm, had infringed on copyrights for its architectural designs, according to the ruling in Highland Holdings Inc. d.b.a. Highland Home as Inc., Robert J. Adams, v. Mid-Continent Casualty Co. by by the 11th U.S. Circuit Court of Appeals in Atlanta

In April 2015, Highland rejected the defense provided by its insurer, Tulsa, Oklahoma-based Mid-Continent, a unit of Great American, and entered into a $650,000 settlement with Home Design that settled all claims in the matter.

Mid-Continent’s policy include coverage for “advertising injury,” according to the ruling.

Both parties moved for summary judgment on the issue of coverage. The U.S. District Court in Tampa, Florida ruled in Mid-Continent’s favor. Highland appealed, and the lower court’s ruling was upheld by a unanimous three-judge panel.

“Highland failed to establish a causal connection between its infringement of the copyrights of house designs and its advertising that would warrant indemnification for every claim that it settled with Home Design,” said the panel’s ruling.

“Highland failed to prove what amount of its settlement was attributable to the claims of advertising injury that were covered by its insurance policy,” the ruling said. The firm “had the burden…to apportion damages and show the settlement, or portions thereof, represented costs that fell within the coverage provisions of the policy,” it said, in quoting another and upholding the lower court’s ruling.