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Duty to defend The duty to defend is imposed upon the insurer for all insureds. This applies to the named insured as well as all other insureds, including those added by an Additional Insured endorsement. This duty to defend is not imposed under contractual liability. The indemnitee does not have the same privity rights to the insurance contract as do the insured. Broader than what is stipulated in coverage policy, courts and case law have always imposed a duty to defend the insureds, until it is clear none of the allegations have any hope of coverage under the policy. That is, duty to defend is imposed so long as there is possibility of potential coverage. Reservation of rights is written documentation issued by the insurer(s) outlining the areas of the policy that they believe grants, removes, or limits coverage for the defense suit. Triggers of coverage Triggers of coverage for "occurrence" policies include the following. Exposure theory What was the date of exposure to injury or damage? Did the injury happen at a single point in time or is it an injury that developed or lasted over a long period? Manifestation theory What was the date that the actual harm was discovered? Injury in fact or actual injury Was there exposure through manifestation? Continuous injury trigger What is the date of exposure to imposition of legal liability? Is this Montrose situation? Is this a Stonewall situation? Wrongful act theory The commission of a wrongful act may trigger coverage before actual harm is done. |
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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and Insurance Skills Center, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.
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