Santa Clara, California based Intel has filed a lawsuit against insurance provider American Guarantee and Liability Insurance (AGLI), alleging breach of contract. In a lawsuit filed last week and amended on Wednesday, Intel has alleged the insurance company of failing to pay for Intel's legal defense in an antitrust lawsuit filed by Advanced Micro Devices.

In a $50 million lawsuit filed against AGLI in the U.S. District Court for Northern California, Intel has alleged that AGLI failed to pay for its legal costs, while the insurance provider was obligated to cover "reasonable" costs related to the litigations. Seeking US$50 million from the insurance company, Intel has called the court, in its lawsuit, to rule that it was AGLI’s duty to cover litigation costs.

In the lawsuit, Intel claimed that it bought several insurance policies to cover lawsuit costs between April 2001 and April 2002. It purchased a $16 million policy from Old Republic Insurance Company (ORIC); it purchased a $50 million policy from AGLI to cover total defense or indemnity coverage; and it also purchased $50 million policy from XL Insurance America. The chipmaker exhausted the ORIC and XL Insurance policies, while AGLI failed to cover legal costs. Intel claimed that it has been covering the costs on its own.

Sunnyvale, California based Advanced Micro Devices and consumers filed lawsuit against Intel in June 2005. AMD alleged that Intel engaged in “unfair business practices and anticompetitive conduct in the sale, promotion and marketing of microprocessors” between 2001 and 2002, which was the time period when Intel purchased AGLI policy to cover legal costs.