{"id":10214,"date":"2026-04-08T20:39:58","date_gmt":"2026-04-08T20:39:58","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/illinois-federal-court-holds-exclusions-preclude-general-liability-and-eo-coverage-for-wrongful-death-suit-carlton-fields\/"},"modified":"2026-04-08T20:39:58","modified_gmt":"2026-04-08T20:39:58","slug":"illinois-federal-court-holds-exclusions-preclude-general-liability-and-eo-coverage-for-wrongful-death-suit-carlton-fields","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/illinois-federal-court-holds-exclusions-preclude-general-liability-and-eo-coverage-for-wrongful-death-suit-carlton-fields\/","title":{"rendered":"Illinois Federal Court Holds Exclusions Preclude General Liability and E&O Coverage for Wrongful Death Suit | Carlton Fields"},"content":{"rendered":"\n
\n

In Everest Indemnity Insurance Co. v. Kates Detective & Security Services Agency Inc.<\/em><\/a>, a federal court, applying Illinois law, held that an insurer had no duty to defend or indemnify its insured or an additional insured in a wrongful death lawsuit, finding a designated operations exclusion in the policy barred coverage for general liability, while a separate exclusion barred coverage for bodily injury claims under the policy\u2019s errors and omissions (E&O) coverage part.<\/p>\n

The case arose after the Chicago Housing Authority (CHA) entered into an agreement for Kates Detective & Security Services Agency to provide security services at government-owned housing. Under the agreement, Kates was required to maintain certain kinds of insurance with CHA as an additional insured.<\/p>\n

Everest issued the subject commercial general liability policy to Kates, which provided two lines of coverage as relevant to the underlying suit. The first line provided general liability coverage for \u201cbodily injury\u201d caused by an \u201coccurrence,\u201d defined to mean \u201can accident.\u201d The second line of coverage was added by an \u201cerrors and omissions liability endorsement\u201d that covered \u201cnegligent act[s], error[s] or omission[s]\u201d that result in a \u201closs.\u201d Notably, the term \u201closs\u201d did not include \u201cbodily injury.\u201d<\/p>\n

Following a tragic incident at the CHA-owned Lincoln Perry Apartments that resulted in a tenant\u2019s death, a wrongful death lawsuit was filed against both CHA and Kates, alleging they failed to provide adequate security that resulted in the death of the tenant. CHA tendered its defense of the lawsuit to Kates, who turned to its insurer, Everest Indemnity Insurance Co., seeking a defense and indemnity under its policy. In response, Everest disclaimed coverage and filed a declaratory judgment action against CHA and Kates, asking the court to confirm it had no obligation to defend or indemnify either party. Everest and CHA subsequently filed cross-motions for summary judgment.<\/p>\n

Although the policy included both a general liability coverage part applicable to bodily injury claims and an E&O coverage part applicable to negligent acts, errors, and omissions, the court ultimately agreed with Everest that neither coverage part applied to the wrongful death suit. The general liability coverage was barred by the policy\u2019s designated operations exclusion, which expressly barred coverage for bodily injury \u201carising out of\u201d work involving government-owned housing. Because the underlying lawsuit stemmed from Kates\u2019 security services at CHA-owned properties \u2014 government-owned housing \u2014 the court agreed with Everest that the exclusion applied squarely to the underlying action. CHA attempted to avoid the exclusion, first by arguing that the underlying lawsuit was not caused by or related to the fact that the Lincoln Perry Apartments were government-owned and therefore did not \u201carise out of\u201d \u201cwork\u201d or \u201coperations.\u201d The court rejected this contention, explaining that the phrase \u201carising out of\u201d requires only a connection to the specified operations \u2014 that is, \u201c[a]ny and all work involving \u2026 government owned \u2026 housing\u201d \u2014 and is not dependent upon the particular theory of liability asserted in the underlying complaint.<\/p>\n

CHA also contended that its decision to hire Kates for security services does not constitute \u201cwork,\u201d such that the designated operations exclusion should not apply. However, the court rejected this argument also, noting that the exclusion does not require looking only to the conduct of the party seeking coverage (i.e., CHA). Rather, the exclusion applies \u201cregardless of whether such operations are conducted by or on behalf of any insured.\u201d Thus, the fact that the lawsuit arose from security services performed at government-owned housing was deemed sufficient to trigger the exclusion, regardless of CHA\u2019s position that its liability stemmed from its hiring decision, rather than the security \u201coperations\u201d themselves.<\/p>\n

The court declined to find the designated operations exclusion ambiguous based on alleged \u201cconflicts\u201d with other policy provisions, emphasizing that an exclusion does not create ambiguity merely because it limits coverage and that no conflict exists unless the exclusion would effectively swallow the policy\u2019s coverage. Here, because the exclusion was narrower and left other coverage intact, the court enforced it according to its plain terms.<\/p>\n

Kates\u2019 reliance on the E&O endorsement fared no better. The court agreed with Everest that the underlying suit, as a claim seeking damages for \u201cbodily injury,\u201d fell outside the endorsement\u2019s definition of covered \u201closs\u201d and was independently barred by the endorsement\u2019s exclusion for claims involving \u201cbodily injury.\u201d Kates contended that the various exclusions in the E&O endorsement, including the bodily injury exclusion, rendered the E&O coverage illusory, arguing that the exclusions individually or collectively precluded coverage for \u201cbodily injury,\u201d \u201cproperty damage,\u201d \u201ccontractual liability,\u201d and several other types of claims. While the court acknowledged the narrow coverage provided by the E&O endorsement, it found that the coverage was not illusory because the E&O endorsement still provided coverage in other scenarios. CHA\u2019s status as an additional insured did not alter that conclusion either, as the court found CHA\u2019s rights as an additional insured could not exceed Kates\u2019 rights as the named insured. Finally, the court found Everest had no duty to defend CHA or Kates, noting that even under Illinois\u2019 broad duty to defend standard, the allegations in the complaint fell squarely within the policy\u2019s exclusions.<\/p>\n

For these reasons, the court granted summary judgment in favor of Everest, holding that it had no duty to defend or indemnify Kates or CHA in the underlying lawsuit.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

In Everest Indemnity Insurance Co. v. Kates Detective & Security Services Agency Inc., a federal court, applying Illinois law, held that an insurer had no duty to defend […]<\/p>\n","protected":false},"author":1,"featured_media":10215,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7691,143,3045,973,7689,554,7692,1009,1876,1001,4577,7690,339,972],"class_list":["post-10214","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-carlton","tag-court","tag-coverage","tag-death","tag-exclusions","tag-federal","tag-fields","tag-general","tag-holds","tag-illinois","tag-liability","tag-preclude","tag-suit","tag-wrongful"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10214","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=10214"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10214\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/10215"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=10214"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=10214"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=10214"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}