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Exclusion For ‘Assumption Of Liability in Contract’ Does Not Apply to Breach of Professional Services

By on October 7, 2016 in Commercial, Contracts, Insurance

In what it described as a case of first impression, the Northern District of California ruled that a professional liability policy that excluded the insured’s “assumption of liability obligations in a contract or agreement” did not extend to breach of warranty or false advertising claims arising out of a genetic data testing company’s marketing and sale of a personal genome service, reports Mary McCutcheon of Farella Braun + Martel LLP.

She writes in the article on the firm’s website that Ironshore Specialty Ins. Co. v. 23andMe, Inc. is noteworthy by the fact that the insurer challenged coverage on this ground.

“While this issue apparently has never been decided in the context of a professional liability policy, both case law and custom and practice recognize that the same phrase used in a general liability policy applies only to liabilities ‘assumed,’ i.e. created by, a contractual indemnity agreement,” according to McCutcheon.

Read the article.