Insurance companies should work for their policyholders, but ultimately, they are in business to make money. Therefore, they often include complex legal language in the terms of their policies that allow them to get out of paying a claim. However, as the International Risk Management Institute explains, insurance companies still have a duty to defend in most cases.
As the insured, you only need to be able to establish that your policy provides the potential for coverage in order to initiate your insurance company’s duty to defend. So, even though the question of coverage is in the air, your carrier may still have the duty to defend because this is broader than the carrier’s duty to provide compensation for the potential loss.
If there are any doubts about whether the facts of a case support your carrier’s duty to defend you in a claim, most courts will resolve the situation in your favor. The company may also have a duty to defend you in a claim where no damages are awarded.
Some types of policies include wording that explicitly obligates a carrier to take over the claim defense process. Other policies may only require the carrier to provide reimbursement for expenses the insured paid while defending the claim. For more information about the duties of insurance companies, please visit our webpage.