Nautilus Insurance v. 1452-4 N. Milwaukee Avenue, LLC

SYKES, Circuit Judge.

Nautilus Insurance Company filed this declaratory-judgment action to determine whether it has a duty to defend or indemnify its insured, 1452-4 North Milwaukee Avenue LLC (“1452 LLC”), against lawsuits alleging that an excavation on 1452 LLC’s property damaged a neighboring building. In Nautilus’s view, none of the claimed damage is covered because two clauses in the insurance policy — the “contractors and subcontractors” exclusion and the “classification limitation” exclusion— eliminate coverage for the property damage alleged in the underlying complaints. The district…