Street Surfing, LLC v. Great American E&S Ins. Co.

Under California law, the duty to defend is broader than the duty to indemnify. In fact, under Montrose Chem. Corp. v. Superior Court, 6 Cal. 4th 287, 300 (1993), “the insured must prove the existence of a potential for coverage, while the insurer must establish the absence of any such potential.” As such, UP argued in its brief that the plaintiff’s advertising injury coverage should be triggered due to reasonable inferences and in light of the facts presented. UP also argued that equitable estoppel should apply due to the circumstances surrounding the insurer’s initital denial of coverage and waiver of exclusions and defenses.