An internationally acclaimed actress, known for her political activism, sued the Boston Symphony Orchestra for breach of contract and alleged that the orchestra's "repudiation and breach of contract had led others to refrain from hiring (her) for professional engagements." It was established that the actress had entered into a contract with the orchestra to appear as a narrator in a series of performances of "Oedipus Rex." The orchestra began receiving protests relating to her appearance after her engagement became known. It eventually canceled her contract and announced the cancellation of the entire performance.

The general liability insurance carried by the orchestra included personal injury liability coverage for injuries sustained by any person arising out of certain offenses committed by the insured in the course of its business, including. . . . "B. the publication or utterance of a libel or slander or of other defamatory or disparaging material, or a publication or utterance in violation of an individual's right of privacy. . . ." An exception was made for advertising, broadcasting or telecasting activities. The policy obligated the company to defend any action brought against the insured seeking damages on account of a covered injury "even if any of the allegations to suit are groundless, false or fraudulent. . ."

The insured orchestra filed an action against its insurers for failing to defend it against the suit brought by the actress. They asserted that the alleged offenses were not within the scope of coverage. The insurers appealed a trial court judgment that they were obligated to defend the insured because of a possibility that the damages sought by the actress and her company would be covered by the policy.

The appeal court noted that the policy required defense of the insured against more than a claim for slander or libel. There was an express obligation to defend against claims for injury arising out of the publication of "other defamatory or disparaging material," words not defined in the policy. As the gist of the claim by the actress was that the breach of contract reflected on her and damaged her reputation, the court concluded that, regardless of its truth or soundness, the claim was within the broad coverage. Defense of the insured was required even if the allegations of the suit were groundless, false or fraudulent.

Trial court judgment in favor of the insured orchestra was affirmed. The court also asserted that there was no evidence of bad faith on the part of the insurers, finding that they had acted in a reasonable manner believing, on the advice of their attorneys, that the complaint did not allege facts which created coverage.

Editor's Note: The pertinent coverage under review was "Group B" of a personal injury liability coverage endorsement included in comprehensive general liability insurance. The same protection is included in "Personal and Advertising Liability Coverage B" in currently written commercial general liability insurance.

(BOSTON SYMPHONY ORCHESTRA, INC. v COMMERCIAL UNION INS. CO. ET AL. Supreme Judicial Court of Massachusetts, Suffolk. Nov. 7, 1989. 545 North Eastern Reporter 2d 1156.)