A Delaware Superior Court judge has ruled that the settlement costs of a class-action lawsuit against the chocolate company Godiva, are not excluded from coverage under either Godiva's D&O policy with Endurance American Insurance Company (Endurance) or Godiva's excess policy with National Union Fire Insurance Company, a subsidiary of American International Group (National Union). The case is G-New, Inc. v. Endurance Am. Ins. Co., 2022 Del. Super. LEXIS 371 (Del. Super. Ct. 2022).
Godiva was hit with a class-action lawsuit in 2019, facing 13 counts of consumer protection and common law violations in California and New York. The plaintiffs in that lawsuit claimed the statement "Belgium 1926" appearing on labels for Godiva confections deceived consumers about the candy's origins. The suit went to mediation, where the parties eventually settled; Godiva is expected to pay $20 million in attorney fees and monetary relief in addition to associated fees and class representative awards, pending final approval of the settlement.
When Godiva sought coverage from Endurance and National Union (collectively, Defendants), both companies denied the claims. In the subsequent suit by Godiva for coverage, Endurance and National Union asserted that Godiva "ha[d] not satisfied it[s] burden of proving the claim constitutes a 'Loss' under the Insuring Agreements" because Godiva's actions in the underlying suit were intentional. Even if Godiva's claims were covered, the insurers contended that the policy exclusions for unfair trade practices and fines imposed by law precluded coverage. Godiva stated that the language of the policies was sufficiently broad to cover both intentional and unintentional acts, and the exclusions didn't apply because the monies it was obligated to pay weren't of the type excluded; alternatively, even if they had been, neither Endurance nor National Union had proved the acts in question were willful violations of the law.