In Payless ShoeSource, Inc. v. The Travelers Companies, Inc., 585 F. 3d 1366 (10th Cir. 2009), the Tenth Circuit held that Travelers did not have a duty to defend and indemnify Payless against a California state court class action alleging violations of the California Labor Code (“CLC”). Though acknowledging that an exclusion in the Travelers’ Employment Practices Liability Policy was grammatically imprecise, the court concluded that the “punctuation peccadillo notwithstanding, the meaning of the parties’ contract is unambiguous.” 585 F. 3d at 1368. And in the Court’s view, the exclusion unmistakably excluded coverage for the claims in the California state court class action.

The dispute centered on Exclusion A.3 of the policy:

The Insured should not be liable for Loss on account…

National Casualty Co. v. Forge Industrial Staffing, Inc., 567 F.3d 871 (7th Cir. 2009), addresses the vexed subject of when an insured is entitled to demand that its insurer appoint independent counsel. National Casualty provided Forge Industrial with employment practices and liability insurance. The EEOC charged Forge Industrial with discrimination. National Casualty agreed to defend Forge Industrial under a reservation of rights and retained counsel to defend Forge Industrial. Because the EPLI policy excluded “willful failure to comply with any law or regulations relating to employment practices,” Forge Industrial demanded that National Casualty provide independent counsel.

 National Casualty’s EPLI policy provided Forge Industrial for coverage for intentional acts, including intentional discrimination, against one of its employees. Nonetheless, the policy excluded “willful failure…