Defeating Common Arguments Insurers Make to Avoid Their Duty to Defend
In this podcast, Adam Hollander, a partner at Taft Stettinius & Hollister LLP, discusses insurers’ duty to defend in the US, detailing such points as basic coverage guarantees, the importance of causes of action, and if absence of a duty to defend will mean that there can be no duty to indemnify.
The duty to defend is the most fundamental duty insurers owe to their policyholders, and the showing necessary to trigger an insurer’s duty to defend is minimal. The policyholder need only show the mere possibility of coverage based on a comparison of the underlying complaint and the policy; nevertheless, insurers often advance meritless arguments to avoid their duty to defend. Therefore, when insurers attempt to avoid their duty to defend, policyholders must critically analyse their coverage rights and be prepared to push back to secure the defence coverage for which they paid a valuable premium.
In this podcast, the speaker provides some detail into:
- the basic coverage guarantees of a liability insurance policy;
- the main differences between the duty to defend and the duty to indemnify;
- determining the duty to defend;
- situations where it is appropriate to look beyond the underlying complaint to either find or negate the duty to defend;
- how causes of action and the labels affixed to them matter in determining the duty to defend;
- underlying class action complaints, should the putative class plaintiffs’ allegations be considered;
- how policy exclusions impact an insurer’s duty to defend;
- what policyholders do in the face of a duty to defend and regarding coverage denial; and
- if absence of a duty to defend always means that there can be no duty to indemnify.
“More often than not, in my experience, the insurance companies will try and focus solely on the class plaintiffs’ allegations and ignore those of the actual class that they seek to represent. And courts have held time and time again that that is just not the appropriate standard for determining a duty to defend, because the duty to defend is based on the mere potential for coverage, so even if a class is yet to be certified, if there are allegations among the class that could potentially trigger the duty to defend, whether it’s an issue of timing of injury, causation of injury, or nature of injury, then those allegations are appropriately considered when determining the duty to defend.” (7:38)
“… it’s very unlikely that an insurer can ever really prove that the policy exclusion actually does apply clear and free from any doubt.” (9:28)
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