IL 1st Dist. – Liability For Discontinued Experimental Vaccine Program Covered

Decision to discontinue program was “professional services.”

The First District Appellate Court held that Lexington Insurance Company breached its defense and indemnity obligations with respect to a settlement Rosalind Franklin University of Medicine and Science paid in an underlying suit filed by former patients seeking compensation for the school’s decision to discontinue an experimental breast cancer vaccine program.  The court agreed with the insured that the decision to discontinue the program constituted “professional services.”  The court also held that the school’s settlement contribution of $2.5 million into a trust – which was the initial grant amount for the program – constituted damages as opposed to an uncovered disgorgement under policy.  The court relieved another Rosalind insurer of liability based on a medical malpractice exclusion.  The case is Rosalind Franklin University of Medicine and Science v. Lexington Ins. Co., Nos. 1–11–3755, 1–11–3756, 2014 Ill. App. 1st (Ill. App. Ct. March 7, 2014).

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