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James River must defend Alabama's fireworks display



A federal appellate court upheld a lower court decision on Thursday, which ruled that James River Insurance Co. must defend a Alabama fireworks company in litigation arising from an accident in which two workers were killed and a third seriously injured.

James River agreed. to defend Owens Cross, Alabama-based Ultratec Special Effects Inc. and other defendants in underlying litigation filed in connection with the 2015 accident, subject to rights, according to the judgment in James River Insurance Co. v. Ultratec Special Effects Inc. et al.

Ultratec Special Effects unit Ultratec HSV had received the James River policy, and both companies as well as an Ultratec Special Effects employee and an associate are responding in the underlying [1

9659002] An appellate court with three judges ruled that an "exclusion of the employer's liability" is excluded, stating that coverage is excluded when employees perform tasks "related to the performance of any insurance d's business" was ambiguous.

"James River argues that the exclusion unequivocally applies equally to all insured persons," the judgment said.

but "does not affect the coverage of claims that an Ultratec HSV employee places against another insured person who is not her employer."

"Because Ultratec ( Special Effects) is being sued by another insured's employee and not its own, defendants say, James River has an obligation to defend it in the underlying lawsuit. "

" The exclusion is ambiguous under Alabama law because it is reasonably open to both. the interpretations. "said the panel. "We must interpret the ambiguous provision in favor of coverage," it said, to confirm the decision of the U.S. District Court in Birmingham.

The district court did not rule on whether James River also has an obligation to make amends, and held that it was not ripe for a decision until liability was established in the underlying trial.

Actors in the case had no comments or did not respond to a request for comment. [19659002]


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