Opinion ID: 3158528
Heading Depth: 3
Heading Rank: 1

Heading: Coverage Section 1

Text: Rather than reading the Coverage Section in its entirety, Montello focuses exclusively on the introductory clause. (“The company will indemnify the insured for all sums which the insured shall become legally obligated to pay as damages and expenses, all as hereinafter defined as included within the term ultimate net loss.”) Montello argues that as a result of Home’s insolvency, it has incurred expenses and may become legally obligated to pay damages. Contrary to Montello’s suggested interpretation, the district court read the provision in its entirety and correctly held: “Canal did not undertake to insure the solvency of Montello’s primary insurer[.]” Canal Ins. Co., 2013 WL 6732658, at 1 The policy provides: Coverage: The company will indemnify the insured for all sums which the insured shall become legally obligated to pay as damages and expenses, all as hereinafter defined as included within the term ultimate net loss, by reason of liability,
(b) assumed by the named insured, or by any officer, director, stockholder or employee thereof while acting within the scope of his duties as such, under any contract or agreement other than liability assumed with respect to occurrences taking place prior to the time such contract or agreement became effective. because of

an occurrence which takes place during the policy period anywhere in the world. I Aplt. App. 38. -6- . The Coverage Section clearly states that Canal’s obligation to indemnify is only triggered by personal injury, property damage, or advertising liability caused by or arising from an occurrence. The policy defines an “occurrence” as “an accident which takes place during the policy period . . . which causes personal injury, property damage or advertising liability[.]” I Aplt. App. 38. We agree with the district court that the “insolvency of the underlying insurer is not an occurrence” as defined in the contract. Canal Ins. Co., 2013 WL 6732658, at . Montello may be incurring defense expenses and may be legally obligated to pay damages, however, those expenses do not arise from an “occurrence” as defined in the contract.