Callahan & Blaine

Callahan & Blain’s client, Sentex Systems, Inc. designs and manufactures access control systems for commercial and residential buildings and gated complexes. When Electronic Security Services sued Sentex, alleging that a former sales manager from their company had joined Sentex and used confidential, trade secret information to recruit its customers, Sentex turned to its insurance company. They asked that Hartford Accident & Indemnity Co. pay for its defense in the lawsuit, based on advertising and personal injury coverage in the policy.

Hartford denied the insurance claim, taking the narrow position that “advertising injury” provisions of commercial insurance policies provided coverage only for allegations of misappropriation of actual “advertising text.”

In the District Court opinion, U.S. District Judge Richard A. Paez ordered Hartford to pay Sentex’s defense costs and damages in a trade secret misappropriation lawsuit. The Ninth Circuit affirmed the opinion of the district court in Sentex Systems Inc. v. Hartford Accident & Indemnity Co., ruling that “advertising injury” provisions of Commercial General Liability insurance policies provide coverage for a broad sphere of allegations of trade secret misappropriation.

This was a precedent-setting case with nationwide implications for the insurance industry and business groups alike. With its decision, the Ninth Circuit Court of Appeals ruled that commercial liability insurance policies provide insurance coverage for claims of trade secret misappropriation.

As a litigation firm with a national reputation for aggressively litigating and consistently winning complex multi-million dollar insurance cases, Callahan & Blain has developed an expertise in going after the insurance companies – and making them pay.

If your insurance claim has been denied, contact the lawyers of Callahan& Blaine for expert legal assistance.