Pekin Insurance had issued a businessowners policy to L. J. Shaw & Company. One of Shaw's adjusters was William L. Hall. Pekin brought this action for declaratory judgment to determine its liability to defend Shaw and Hall in an underlying action for damages brought by Joseph P. Caulfield because of "damaging statements" made by Hall.

The record showed a fire had occurred at the printing plant of Litho Productions which caused substantial damage to the building and contents. Shaw and Hall represented the insurance company which covered Litho, and Caulfield represented Litho in the fire investigation and claim forms. Caulfield contended that Shaw and Hall had acted in a manner intended to induce Litho to terminate its relationship with Caulfield. The businessowners policy issued by Pekin excluded "property damage, personal injury, or advertising injury" due to rendering or failure to render any professional service. This included but was not limited to " . . . preparing, approving, or failing to prepare or approve maps, drawings, opinions, reports, surveys, change orders, designs or specifications."

The insured contended the policy covered since it applied to personal injury caused "by an offense arising out of your business . . . " The policy also covered injury arising out of oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services.

The trial court entered summary judgment against Pekin on the duty to defend, and Pekin appealed.

The higher court noted that Caulfield contended that Hall, as an employee of Shaw, had falsely represented to several people that Caulfield had "grossly overstated, and possibly engaged in fraudulent misrepresentations of Litho's fire loss damage." Hall did this, according to the complaint, as a pretext to cause Caulfield's termination by Litho, which, in fact, occurred.

In conclusion, the higher court agreed with Pekin that the "professional services" exclusion was not ambiguous, and it relieved Pekin of any duty to defend Shaw and Hall since Hall's statements were "professional opinions expressed by an adjuster in course of adjusting claim on behalf of the fire insurer. . ."

The judgment entered in the trial court in favor of Shaw and Hall was reversed and judgment was entered in favor of Pekin.

Pekin Insurance Company, Appellant v. L. J. Shaw & Company, and William L. Hall--No. 1-96-0535-Appellate Court of Illinois, First District, Fourth Division--August 21, 1997--684 North Eastern Reporter 2d 853.