The maker of a line of toys featuring Thomas and Friends was insured by Ace American...

The maker of a line of toys featuring Thomas and Friends was insured by Ace American Insurance. The toy maker was sued in class action suits in the United States because of a recall of its toys for containing lead-based paint. The toys were made, painted, and tested in China. The insurance policy had a “coverage territory” exclusion which barred coverage of “occurrences” of bodily injury or property damage taking place in the United States. The defendants argued that the injuries took place in the United States, where they were exposed to the lead paint, not where the toys were manufactured and tested. Should the court interpret the policy to make the insurer defend the lawsuits? Why?

Expert Solution

Yes here insurer also have the right to explain why the policy is given in such a way as each and every policy has got its own llimitations.People are given right to sue the company which manufactured the toys in the same way the court must give right to the insurer along with the company to defend the case in the the court and court should interept the policy as the insurer is the one who should pay the people for their losses which makes them the primary party in this case.

Hence court should interpret the policy and make the insurer to defend the law suits.

Rahul Sunny answered 2 years ago

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