Insurer Files Cell Phone Coverage Lawsuits

August 20, 2001

According to Mealy Publications, a trio of insurance coverage lawsuits related to cell phone personal injury litigation have been filed in recent weeks.

Zurich-American Insurance Co. on July 23 filed actions in New York and Texas state courts seeking declaratory relief and contribution in connection with putative class actions involving cell phone claims.

Both Zurich-American actions are premised upon Audiovox Corp.’s and Nokia Inc.’s requests for coverage of putative class actions in New York, Georgia, Louisiana, Maryland and Pennsylvania by cell phone users against cell phone manufacturers, retailers and related service providers.

AT&T Wireless, also named in the underlying lawsuits, allegedly promoted and sold the cell phones. It seeks coverage from several insurance companies: Fireman’s Fund Insurance Co.; Employers Insurance of Wausau; Travelers Property Casualty Insurance Co.; Travelers Casualty and Surety Co.; Federal Insurance Co.; The American Insurance Co.; ACE American Insurance Co.; International Insurance Co.; Greenwich Insurance Co.; Royal Insurance Co. of America; Insurance Company of North America; TIG Insurance Co. and National Surety Corp.

The underlying claimants allege that the cell phones are defective because they emit radio frequency radiation and implicate the industry in a conspiracy to withhold information as to the defects and failure to provide headsets for use in mitigating their exposure.

The class actions further charge the insureds with knowledge of reasonable and economical methods to insulate cell phone users from exposure to the radiation. They charge the insureds with strict liability for the failure to warn and design/manufacturing defects, breach of implied warranties and fraud. In its complaint filed in the New York County Supreme Court, Zurich seeks a declaration that it has no duty to defend or indemnify Audiovox Corp. against these suits.

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