Intel sues Zurich Financial unit over insurance

Intel Corp. sued a unit of Zurich Financial Services AG, claiming the insurer denied coverage for $50 million Intel has incurred defending itself against an antitrust suit by Advanced Micro Devices Inc.

Intel, the world's biggest chipmaker, says in the breach of contract lawsuit it has an excess-liability policy with Zurich Financial's American Guarantee & Liability Insurance Co. that provides $50 million in litigation defense coverage. Intel already has exhausted $66 million in coverage through other policies, according to the complaint filed in federal court in San Francisco.

The excess-liability policy covers litigation stemming from advertising activities, Intel says. Because AMD's lawsuit claims Intel's ad campaigns constitute unfair competition, Intel says in its complaint, it's entitled to coverage.

"AGLI has failed and refused to provide a defense for Intel, ignored the clear potential for coverage of the AMD litigation and repudiated its policy obligations by denying coverage," according to the Jan. 23 complaint.

Steve McKay, a spokesman in Schaumburg, for the U.S. unit of Zurich Financial, Switzerland's biggest insurer, declined to comment.

AMD has accused Intel of using illegal practices to stop computer makers from buying AMD chips. The two companies account for almost all personal-computer chip sales.

The case is Intel Corp. v. American Guarantee, 09-299, U.S. District Court, Northern District of California (San Francisco).