The Illinois Appellate Court overturned a trial court’s decision that allowed for Farmers Insurance to get out of its contractual obligation to pay for our client’s successful defense of a meritless libel suit. When a business or homeowner is sued for libel, they may not realize it but their CGL business insurance policy or homeowners insurance policy often plainly provides for coverage of libel, defamation and slander suits. Most insurance carriers stand behind their insureds and honor the obligation to pay for the defense, even when the allegations are ugly. That is what happened for Bill Cosby who used his homeowners’ insurance policy to defend against libel suits brought by women when he denied drugging and raping them. If a carrier is willing to defend Cosby it should defend its insureds when they are wrongfully sued for libel simply for exercising their First Amendment free speech rights by posting a negative review on Yelp or stating a strongly held position at work that they don’t like how their supervisor treats them. After all the insurance we pay for insurance policies to protect us even when we make a mistake.
Farmers spends millions of dollars on television advertising claiming that it will stand behind its insureds when they make every conceivable mistake; it never advertises that it will attack its own insureds, place all the blame on them and refuse to honor the express provisions of its form home owners insurance policy which contains a standard provision to defend homeowners sued for libel.
Given Farmers’ advertisements, our client never imagined that Farmers would betray and attack him as opposed to paying for his defense of meritless libel suit.