SW Legal studies in Business

Insurance Company Has Duty to Defend Novel Damages Claim

Texas high court held that a commercial insurer has a duty to defend the maker of a cellphone sued for alleged damage to human cells caused by radiation emitted by cellphones. The claim is for bodily injury caused by the product; that falls under the standard commercial general liability policy.

Topic Insurance
Key Words

Duty to Defend; Commercial General Liability; Cellphones

C A S E   S U M M A R Y

Nokia and other cellphone makers were sued in a class action suit claiming that radio frequency radiation from wireless phones causes biological injury. Nokia turned defense of the case to Zurich, from which it bought commercial general liability (CGL) insurance. Not sure if it had a duty to defend Nokia, Zurich sued Nokia and sought a declaration that it was not responsible for defending Nokia or for payments sought by plaintiffs. The trial court held for Zurich. The appeals court reversed in part and affirmed in part. The matter was appealed.


Affirmed as modified. Whether or not this is a class action that should be certified is not relevant to the issue here of a duty to defend. The coverage for “bodily injury” under the CGL policy extends to the alleged biological injury to human cells caused by emissions from cellphones. The complaints filed sought damages, which brings the claims under policy coverage. The policy contained a business risk exclusion. That precludes coverage for economic loss claims based on product defects.

Citation Zurich American Ins. Co. v. Nokia, Inc., ---S.W.3d--- (2008 WL 3991183, Sup. Ct., Tex., 2008)

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