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Monday, January 23, 2012, 03:10 pm PT (06:10 pm ET)

Insurance company sues to deny Apple coverage in slip-and-fall claim

A new lawsuit filed against Apple in Chicago this week adds to the company's considerable list of legal battles, though this particular case isn't a multi-biliion dollar patent dispute but instead a common denial of insurance stemming from a 2010 civil suit.

The Colony Insurance Company on Friday lodged a complaint in an Illinois district court disputing liability for a claim from Apple, the Chicago Transit Authority and a Chicago construction company over a civil suit involving an incident that took place during the building of an Apple Store in 2010.

In early 2010, the Cupertino, Calif. tech giant entered a joint venture with the CTA to pay for renovations to a subway station near a new Apple Store location to be built by contractor Pepper Construction Company. At the time, the $4 million deal was said to have granted Apple the naming rights of the station as well as the ability to buy out all advertising space if the company so pleased.

Pepper subcontracted Gilco Scaffolding Co., LLC, the company covered by Colony Insurance, to set up shoring and scaffolding screen services at the construction and renovation sites. As a stipulation of the agreement, Apple and Pepper were identified as "Additional Insureds," and were to be protected by Colony's limited liability coverage.

On March 17, 2010, while walking through the active Apple Store construction site, Esther Gonzalez tripped and fell on the sidewalk, fracturing her hip. Following a March 2011 civil suit against Apple, Pepper and the CTA, Gonzalez filed an amended complaint that added Gilco as a defendant.

Unfortunately for Apple and Pepper, the Gilco Scaffolding Screen Subcontract Agreement was executed on April 5, 2010, meaning that Gonzalez's "bodily injury" was not yet covered as the incident occurred 19 days prior to the effective date of liability.

Lincoln Park Apple Store

Completed Lincoln Park, Chicago Apple Store | Source: Apple


Apple, Pepper and the CTA sued Colony after they were denied coverage for legal fees and damages following the conclusion of the Gonzalez suit. Colony fired back with its own complaint, claiming the Gonzalez incident occurred before the Apple and Pepper were included under "Additional Insured," and that the CTA was not covered at all under the blanket endorsement from Gilco.

Lincoln Park CTA subway station

Renovated North/Clybourn CTA subway station | Source: Apple


It is unclear whether the Illinois Distrcit Court will find Colony liable for the claim or if Apple will continue to press the matter when it already has worldwide patent disputes to deal with. The amount of damages and legal fees is undisclosed, though filing with the district court reveals that it exceeds $75,000.