In CSA Nutraceuticals GP, L.L.C. v. Chub Custom Ins. Co., No. 12-10317, 2013 WL 28399 (5th Cir., Jan. 2, 2013), the Fifth Circuit affirmed a district court’s decision that an insurer did not owe a duty to defend to its insured.  Chubb Custom Insurance Company (“Chubb”) provided commercial general liability insurance to CSA Nutraceuticals.  According to the policy, Chubb agreed to defend, and if necessary, indemnify CSA Nutraceuticals against all suits alleging “bodily injury” arising from the products manufactured, sold, or distributed by CSA Nutraceuticals.  CSA Nutraceuticals was sued in an underlying action for various injuries and damages arising from the purchase and use of its diet and nutritional products, and tendered to Chubb for defense and possible indemnification under the terms of the Policy.  Chubb denied coverage because the complaints filed in the underlying suit did not allege recovery for “bodily injury” under the CGL policy.

 CSA  Nutraceuticals  sued  Chubb  in  district  court,  and  the  parties  filed  cross  motions  for  summary judgment.  The district court granted Chubb’s Motion for Summary Judgment and denied CSA Nutraceuticals summary judgment on the issue of the duty to defend since no bodily injury claim was pled in the underlying suit.  Specifically, the district court held, and the Fifth Circuit agreed, the complaints in the underlying suit clearly and unequivocally alleged that consumers were induced to purchase ineffective weight loss products by false and fraudulent misrepresentations.  However, the complaints do not allege that any consumer suffered physical harm by the ineffective weight loss products.  Both courts observed that “failing to achieve weight reduction means the body basically did not change. It does not mean the body was injured.”  As such, the Fifth Circuit affirmed the district court’s decision that the underlying case alleged financial harm, not physical injury.  As such, Chubb did not owe a defense to CSA Nutraceuticals because no bodily injury claim was plead in the underlying suit to trigger coverage.

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