Panfil v. Nautilus Ins. Co., No. 14-3084 (7th Cir. 2015)
Annotate this CaseCastro-Cortes was working for Astro, a subcontractor of JRJ, when he fell through a hole on the jRJ property. He sued JRJ for personal injury in Illinois state court. After being served in that suit, JRJ’s two members, Panfil and Michelon, filed a report with Nautilus under a general commercial liability policy. Nautilus refused to defend, citing three grounds: that the underlying lawsuit was against JRJ, but the named insureds were Panfil and Michelon; the “Contractor-Subcontracted Work Endorsement;” and the “Employee Exclusion.” The JRJ parties filed a federal suit for breach of contract. On summary judgment, the district court determined that Nautilus breached its duty to defend because there was at least the potential for coverage of the underlying lawsuit. The Seventh Circuit affirmed, stating that it is a close case and that the bar to finding a duty to defend is low. The court construed the language of the exclusions in favor of JRJ, noting that the burden of proving that a claim falls within an exclusion rests on the insurer.
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