A federal court has ruled that The Beacon Mutual Insurance Co., Rhode Island’s largest workers’ compensation carrier, is entitled to be the only Beacon selling insurance in the state, because its name is so familiar and the presence of other Beacons could confuse customers.
The ruling, by U.S. District Judge William E. Smith, in Providence, will force OneBeacon Insurance Group, a Boston-based carrier, to use another name in the Ocean State, The Beacon’s home market. Everywhere else, OneBeacon can use its name freely.
The decision echoes the balance struck by another federal court last year in a dispute between Providence-based Citizens Financial Group and Citizens National Bank of Evans City, a mid-sized, 126-year-old bank in Western Pennsylvania that found itself with a powerful namesake after Citizens bought the Mellon Financial Corp.’s branches and rebranded them.
After extensive litigation, the older, local Citizens prevailed in its effort to keep the newcomer from using the same name on its home turf.
Like Citizens, Beacon is a fairly common name, with 34 other companies in insurance or finance using Beacon in their names, according to a Web search referenced in Smith’s decision. Twenty-nine of those companies also use a lighthouse logo, just as The Beacon and OneBeacon do.
Yet in Rhode Island, since The Beacon was created in 1992, the name had been unique in this field, and, the company argued, it had become a household word. As evidence, The Beacon presented the results of three surveys conducted on its behalf in the fall of 2001 showing that, among 237 people who buy insurance for their companies, 69 percent of those who heard the name and 79 percent of those who read it recognized it as a workers’ comp carrier.
OneBeacon, which has only a small market share in Rhode Island, also writes workers’ compensation, though it’s a much broader-focused company than The Beacon, with both personal and business insurance products to cover both general and industry-specific property and casualty risks. As of last year, Smith’s ruling says, OneBeacon had 24 workers’ comp policies in Rhode Island.
OneBeacon used to be called CGU Insurance, but it changed its name in June 2001 after being acquired by New Hampshire-based White Mountains Insurance. The name refers to the company’s address, One Beacon St.
Shortly after the name change, a Beacon official testified, the workers’ comp carrier became aware of several instances of apparent confusion among Rhode Island employers, workers, vendors, doctors, court personnel and others. Checks, letters, medical records and claims for OneBeacon were sent to The Beacon’s offices, and OneBeacon got mail for The Beacon.
The Beacon, represented by Providence law firm Partridge, Snow & Hahn, sued the Boston insurer shortly after the name change, and the case has been in the federal courts ever since. The U.S. District Court in Providence originally granted summary judgment in OneBeacon’s favor, but the 1st Circuit Court of Appeals reversed the ruling and sent the case back to the lower court. This new ruling, issued July 15, reflects the legal guidance provided by the appeals court.
In a written statement, Beacon CEO Joseph A. Solomon said he was “gratified” by the victory, which “will hopefully end any and all confusion arising from OneBeacon’s entry into the Rhode Island marketplace a decade after The Beacon has established itself as a premium insurer. …
This clear-cut victory is a win for all our policyholders, as it allows The Beacon to move forward free of the confusion presently found in the Rhode Island marketplace.”
