duty to defend
A term used to describe an insurer's obligation to provide an insured with
defense to claims made under a liability insurance policy. As a general rule,
an insured need only establish that there is potential for coverage under a
policy to give rise to the insurer's duty to defend. Therefore, the duty to
defend may exist even where coverage is in doubt and ultimately does not apply.
Implicit in this rule is the principle that an insurer's duty to defend an insured
is broader than its duty to indemnify. Moreover, an insurer may owe a duty to
defend its insured against a claim in which ultimately no damages are awarded,
and any doubt as to whether the facts support a duty to defend is usually resolved
in the insured's favor.
With respect to directors and officers (D&O) and employment practices liability
insurance (EPLI) policies, policies containing explicit "duty to defend" wording obligate
an insurer to assume control of the claim defense process, including selecting
counsel and paying legal bills. In contrast, non-duty to defend (or duty to
pay) policies require only that the insurer reimburse the insured for funds
expended by the insured in defending a claim. See also
Duty to pay.
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