Zurich American Must Defend Electricity Maine in Rate Scuffle

Zurich American Insurance Co. must defend Electricity Maine LLC against a class action that claims the private company negligently misrepresented its rates, the First Circuit said June 17.

Two Electricity Maine customers want to represent 200,000 people who saw their electricity rates jump after their policies automatically renewed. They’re seeking $35 million in damages, alleging state law negligence and federal racketeering claims.

The federal appeals court applied Maine law to the insurance policy terms at issue and concluded that the insurance company’s duty to defend was indeed triggered by the class action’s claims.

The policy’s duty to defend clause contemplated ...