Sixth Circuit follows Fifth Circuit in holding that insurance company has no duty to defend company with breach of contract exclusion in insurance policy where claims against it would not have existed but for the breach

The Sixth Circuit affirmed the Western District of Kentucky’s grant of summary judgment in favor of an insurer, concluding that the insurer had no duty to defend the insured company who hired a person alleged to have disclosed to the company the proprietary information of his former employer.  Capital Special Insurance v. Industrial Electronics, LLC, Case No. 09-6368 (PDF)

The company’s insurance policy excluded coverage for certain injuries “arising out of a breach of contract.”  The company argued that because the claims against it were not for breach of contract, but instead for tortious interference and statutory claims, the exclusion from insurance coverage did not apply.

The Sixth Circuit disagreed, citing to the Fifth Circuit case of Gemini Insurance Co. v. The Andy Boyd Co. LLC, 06-20464 (PDF) for the proposition that “the broad language of the exclusion requires only that the alleged injuries be incidentally related or connected to the breach of contract.”