General Agents Insurance Co. of America, Inc. v. Midwest Sporting Goods Co.

In this case we must decide whether an insurer may recover amounts it paid for defense of its insured in a lawsuit against the insured for claims that do not fall within the coverage of the insurance policy. We hold that under the circumstances of this case, where the insured knew when it accepted the payments that the insurer intended to seek recovery of defense costs if the court agreed that the claims were not covered, the insurer may recover any payments made for the claims not covered by the policy.

The City of Chicago (the City) and Cook County sued Midwest Sporting Goods (Midwest) for…