Northwestern National Insurance Co. v. Act I, Inc.

This appeal is brought by an insurer from a final money judgment in favor of an insured plaintiff.

Plaintiff, Act I, Inc., designs, manufactures, and sells women’s clothes. Each fashion season it produces about 150 prototype garments to be shown at trade shows. If a sample garment receives a favorable response at the shows, Act I makes a pattern, and the garment goes into production. In 1980, Act I purchased a $50,000 primary insurance policy from Federal Insurance Company which contained a rider for garment show coverage. The rider provided:

It is understood and agreed that Garment Show…