Which statement best describes the liability insurer’s duty to defend?

Which statement best describes the liability insurer’s duty to defend?

• A. The duty to defend is broader than the duty to pay damages, and may include defense costs even if the claim is groundless
• B. The duty to defend applies only after damages are awarded
• C. The duty to defend is identical to the duty to pay damages
• D. The duty to defend never includes attorney fees

Answer: (A)

In liability insurance, the insurer’s duty to defend is triggered by any claim that could be within the policy’s coverage, and it is broader than the duty to pay damages. The insurer must provide a defense and cover defense costs, including attorney fees, even if the claim is groundless or meritless, as long as there’s potential coverage. The duty to indemnify—paying damages—only comes into play if damages are actually awarded or settled within the policy limits. So the statement that the duty to defend is broader than the duty to pay damages and may include defense costs even if the claim is groundless best describes the relationship.

In liability insurance, the insurer’s duty to defend is triggered by any claim that could be within the policy’s coverage, and it is broader than the duty to pay damages. The insurer must provide a defense and cover defense costs, including attorney fees, even if the claim is groundless or meritless, as long as there’s potential coverage. The duty to indemnify—paying damages—only comes into play if damages are actually awarded or settled within the policy limits. So the statement that the duty to defend is broader than the duty to pay damages and may include defense costs even if the claim is groundless best describes the relationship.