Hunton Insurance Recovery Blog

A federal court in Virginia recently held in Travelers Casualty and Surety Company v. Schur, No. 3:15CV60-HEH (E.D.Va., Nov. 24, 2015), that a liability insurer’s so-called “business pursuits” and “known falsity” exclusions do not preclude a defense against defamation allegations where the allegations raised at least a potential for coverage under the policy.  The decision illustrates the continued application of Virginia’s “eight corners” and “potentiality” rules, which mandate a narrow application of the underlying allegations against the language of the policy and require a defense if any allegation raises even a potentiality for coverage.