Chubb off hook due to policy’s media exclusion

Chubb Ltd. was not obligated to defend a satellite television company under a media exclusion in its policy, a federal appeals court said Wednesday, in affirming a lower court ruling.

Englewood, Colorado-based Dish Network Corp., which provides television products and services, obtained a commercial general liability policy from Chubb Ltd. unit Ace American Insurance Co. that included a media exclusion, according to the ruling by the 2nd U.S. Court of Appeals in New York in Dish Network Corp., Dish Network LLC v. Ace American Insurance Co.

Dish sought coverage from Ace under its insurance policy after it was sued by four television networks in separate lawsuits for alleged copyright infringement, the ruling said.

Ace denied coverage and refused to defend the company, relying on its media exclusion, which excluded coverage for insureds whose business was broadcasting.

The lawsuits were settled without Dish incurring any monetary liability, but Dish, which incurred legal fees and other expenses, filed suit against Ace in U.S. District Court in New York charging that the insurer had breached its duty to defend by failing to defend it or reimburse its defense expenditures.

The district court ruled in Dish’s favor, and was unanimously affirmed by a three-judge appeals court panel.

Ace does not have a duty to defend Dish under its policy, the ruling said. “First, ‘broadcasting’ as used in its Media Exclusion, is not ambiguous and applies to Dish’s business. Second, Dish’s argument that the plain and ordinary meaning of ‘broadcasting’ does not apply here fails,” the ruling said.

The policy’s definitions “make clear that the term ‘broadcast,’ put simply, means transmitting a signal, especially a radio or television signal, to some number of receivers – which is precisely the nature of Dish’s business,” it said.

“The line that Dish seeks to draw – between free transmission and transmission to paid subscribers – is not reflected in the common use of the term ‘broadcast,’” it said, in affirming the lower court ruling.

Attorneys in the case did not respond to requests for comment.