In the absence of Insurance Coverage case law directly addressing Issues of Insurance Coverage for Chinese Drywall Damages Claims, as I have often noted in this space and on www.insuranceclaimsissues.typepad.com, general principles of insurance law will therefore guide predictions in specific claims situations until there is a body of decided case law on the subject. A recent decision of the Seventh Circuit Court of Appeals under Illinois law, proves the point once again if ever it needed proving.
In Ace American Insurance Co. v. RC2 Corporation, Download Ace American Insurance Co. v. RC2 Corporation (7th Cir. Case No. 09.3032 Opinion Filed April 5, 2010), also published as 2010 WL 1267293 * (7th Cir. April 5, 2010), the Seventh Circuit panel addressed a specific policy provision which excluded coverage of occurrences that took place within the United States. The Seventh Circuit held that this specific exclusion in that case, barred a duty to defend under Illinois law, where underlying cases filed against the insured were based on toys manufactured in China and which allegedly caused damage in the United States from exposure to lead paint put on the toys in China.
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