The Ninth Circuit, in United National Ins. Co. v. Spectrum Worldwide, Inc., No. 07-55833, 2009 U.S. App. LEXIS 1827 (9th Cir. February 2, 2009), recently sent a reminder to policyholders that defenses raised in the underlying action may not only affect coverage, but may also leave individual insureds liable for reimbursement to the carrier. In Spectrum, the Ninth Circuit held that a marketer was judicially estopped from obtaining advertising insurance coverage for trade dress infringement claims. The Ninth Circuit determined that the marketer made arguments in the underlying trade dress litigation that precluded insurance coverage for the defense of the trade dress claim.
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