A company involved in the packaging and distributing of soil additive products carried general liability insurance that included advertising injury liability coverage. A competitor filed suit against the insured, alleging the composted cow and sheep manure products were mislabeled and federal and state unfair competition laws violated. The insurer denied coverage under the following pertinent exclusion:

"This insurance does not apply to advertising injury arising out of incorrect description (emphasis ours) or mistake in advertised price of goods, products or services sold, offered for sale or advertised." The insurer argued that "incorrect description" referred to the insured's products, something apart from a price mistake, and that the claim was therefore not covered.

The insured having assigned its rights and claims under the policy to the claimant, the latter argued that the exclusionary language was ambiguous and in pertinent part, "can be read to exclude only an incorrect description in price or a mistake in price, and does not exclude an incorrect description of goods."

On appeal, the judgment of a trial court was affirmed in favor of the insurance company and against the claimant. The court reasoned that "incorrect description" referred to products and "mistake" to advertised price. The use of a second term would be redundant if both referred to pricing.

(NEW HAMPSHIRE INSURANCE COMPANY, Appellee v. POWER-O-PEAT, INC. ET AL., ORGANIC CONVERSION CORPORATION, Appellant. United States Court of Appeals for the Eighth Circuit. No. 89-5518. June 22, 1990. CCH 1990 Fire and Casualty Cases, Paragraph 2587.)