Liberty Mutual is back in court with Red Roof Inns - and the hotel chain says the insurer is ignoring a court order to defend it.
In a complaint filed on May 15, 2026, in the US District Court for the Southern District of Ohio, Red Roof Inns and three sister entities accuse Liberty Mutual Fire Insurance Company of breach of contract and bad faith for walking away from 17 underlying lawsuits brought by alleged sex trafficking victims at Red Roof properties.
The twist: the same court has already weighed in. According to the complaint, on March 19, 2026, the court ordered Liberty to defend Red Roof in 11 other lawsuits with what the filing calls "substantively identical allegations." Red Roof says Liberty has refused to back down on its denials.
Liberty served as Red Roof's primary general liability carrier for eight straight years, the complaint says, writing eight consecutive commercial general liability policies from July 1, 2011 to July 1, 2019. Over that time, the filing states, Liberty agreed to defend more than 50 trafficking lawsuits against Red Roof and settled the claims of more than a dozen underlying plaintiffs.
Then it stopped. The complaint alleges Liberty "has and/or intends to arbitrarily deny coverage for Red Roof for new human trafficking lawsuits - including seventeen underlying lawsuits which are the subject of this action - without any valid basis."
The 17 suits split into two buckets. Eleven are described in the filing as the "Denied Lawsuits" - filed by plaintiffs identified by initials in federal courts across Ohio, Georgia, New Jersey and Nevada, plus the Los Angeles Superior Court. According to the complaint, the plaintiffs allege they were trafficked at Red Roof properties between approximately 2006 and 2020 and that Red Roof is liable under the Trafficking Victims Protection Reauthorization Act, 18 U.S.C. § 1595 (TVPRA). The filing notes the plaintiffs do not allege the traffickers were Red Roof employees or agents.
The other six are the "Tendered Lawsuits," more recent trafficking suits Red Roof has sent to Liberty. The complaint says Liberty has not yet issued a coverage position on those, and Red Roof expects another denial.
Two policy provisions are the battleground.
Coverage A, Bodily Injury and Property Damage Liability, says Liberty "will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies" and "will have the right and duty to defend the insured against any 'suit' seeking those damages." The policy defines "bodily injury" to include "Mental anguish, shock or humiliation arising out of injury," with mental anguish meaning "any type of mental or emotional illness or distress." An "occurrence" is "an accident, including continuous or repeated exposure to substantially the same general harmful conditions."
Coverage B, Personal and Advertising Injury Liability, picks up injury arising out of offences including "False arrest, detention or imprisonment." Red Roof argues the trafficking complaints "at least arguably or potentially allege" false imprisonment by someone other than Red Roof - enough, it says, to trigger Liberty's duty to defend.
Red Roof leans on Ohio's low bar for defence. Citing City of Sharonville v. Am. Emplrs. Ins. Co., the complaint says a carrier has "an absolute duty to defend an action where the complaint contains an allegation in any one of its claims that could arguably be covered by the insurance policy."
The bad-faith count turns on selective treatment. Red Roof alleges Liberty has agreed to defend other policyholders "facing nearly identical allegations under insurance policies providing substantially and/or the same coverage as the Liberty Policies." The filing characterises Liberty's denials as "arbitrary and capricious, malicious, reckless, willful" and asks for punitive damages on top of defence costs.
The hotel chain is seeking damages above $75,000, a declaration that Liberty must defend all 17 suits, an order forcing Liberty to advance defence costs as they come in, punitive damages, pre- and post-judgment interest, and attorney's fees.
The allegations have not been tested in court. Liberty has not yet filed a response to the complaint, and no court has ruled on the new claims.
