Strip Club Insurer Must Defend Claims of Misusing Models’ Images

First Mercury Insurance Co. must defend a lawsuit against a policyholder that operates a strip club accused of using models’ images for advertising without authorization, after the Northern District of Illinois found the underlying claims “arguably” fall under the policy’s coverage for negligence.

First Mercury must defend Harvey, Ill., club owner Triple Location LLC, doing business as Club O, because the underlying complaint may be read to allege negligent acts, for which coverage attaches, the court said.

Although the complaint also alleges intentional acts, for which coverage is excluded, “the Federal Rules permit inconsistent pleading, including the simultaneous pleading of ...