9th Circuit Takes Hard Line on Insurer’s Duty to Defend

9th Circuit held that the provision did not operate to bar coverage for an underlying lawsuit involving allegations of sexual harassment and sex discrimination. Eastwood had sued its insurer, U.S. Specialty Insurance Co., for failing to defend it from claims brought against Eastwood by a former employee, Elizabeth Ayala for wrongful termination and violations of the Family Medical Leave Act and the California Family Rights Act. Id. at *1.