News & Insights

Illinois Supreme Court revivifies how courts look at insurance policy coverage issues.  

The Illinois Supreme Court recently reversed the Appellate Court below in a declaratory judgment action for construction whether an insurer had a duty to defend its insured in litigation. Under Illinois insurance law, such dec actions (as they are called) are commonly filed by insurers who decline coverage on a particular claim but want to avoid a court later finding that the insurer should not have declined coverage. In such latter instance the insurer could find itself not only paying the insured’s defense and indemnification claims, but also could be burdened with paying penalty amounts for improper claims practices under the Illinois Insurance Code. In Acuity v. M/I Homes of Chicago, LLC, 2023 IL 129087, the Supreme Court directed courts to stop looking to how terms were defined in other cases and to focus on the specific definitions of terms and the conditions and exclusions in the particular insurance policy before the court.