defense costs endorsements
For use on CGL policies, these nonstandard endorsements state that if the
insurer agrees to provide a defense to an insured, but it is later
determined that the claim would not be covered by the policy (and thus there
is no duty to defend), the insurer is entitled to reimbursement of defense
costs incurred up to that point. The endorsement is intended to comply with
court rulings in some states that the insurer's right to reimbursement must
be preserved in the language of the insurance policy. Some of the
endorsements require the insurer to give written notice that coverage may
not apply (a reservation of rights letter) and of the insurer's intent to
seek reimbursement of defense costs in the event the claim is determined not
to be covered.