Illinois Court Reverses Order Declaring that Insurance Company has no Duty to Defend Insured in Negligent Entrustment Claim

When it comes to a personal injury claim, many issues may arise regarding insurance coverage. Having a seasoned Illinois car accident lawyer on your side to help you navigate this process and to ensure that you are treated fairly can make all of the difference. A recent Illinois appellate court decision discussed whether an insurance company had a duty to indemnify its insured in a personal injury action.

The facts that gave rise to the dispute are as follows. A woman filed a lawsuit to recover damages from the driver of a vehicle that struck her vehicle. The woman alleged that the other driver acted negligently when he caused the vehicle he was driving to collide with her vehicle. The woman also alleged that the other driver was driving a vehicle negligently entrusted to him by the insured. More specifically, the woman alleged that the insured knew or should have known that the other driver was intoxicated.

The insured’s insurance company filed for a declaratory judgment, seeking a declaration describing whether it had a duty to defend the insured and the other driver in the lawsuit. Initially, the trial court granted a motion for summary judgment in favor of the insurance company. It concluded that the insurance company did not have a duty to defend the insured or the other driver. The woman appealed the trial court’s decision regarding this lack of a duty to defend either party.

The woman argued that the trial court erred when it concluded that a negligent entrustment claim does not constitute an accident for the purpose of obtaining insurance coverage. Reviewing case precedent on the issue, the woman argued that a negligent entrustment claim will not be covered under an insurance policy only when the underlying legal action is based entirely on deliberate actions. Additionally, the woman argued that public policy would favor an outcome in which the insurance company was required to provide coverage for the negligent entrustment claim.

On review, the appellate court concluded that the insurance company had a legal duty to defend the insured and the other driver in the negligent entrustment claim, based on the plain language of the insurance policy. According to Illinois precedent, an insurer must defend a lawsuit unless the allegations of the lawsuit show that the plaintiff in the lawsuit will not be able to establish that the insured is liable under any legal theory advanced in the complaint without also proving facts that demonstrate that the loss is beyond the coverage of the policy. The court also noted that insurance policies are to be construed liberally in favor of coverage and that any doubt regarding an insurer’s duty to defend must be resolved in favor of the insured.

If you were involved in a car accident or another type of accident, our seasoned team of experienced lawyers is ready to help you ensure that you are treated fairly. We proudly serve clients throughout Illinois and offer a free consultation to assist you with exploring your legal rights and options. Call us now at 773-545-8849 or contact us online to get started.

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