Commercial General Liability (“CGL”) policies typically provide two distinct benefits to policyholders: defense against potentially covered claims, and indemnity against covered claims. Because the duty to defend is broader than the duty to indemnify, it is as important, if not more important, than the duty to indemnify.
Insurers' Rights to Recoup Defense Costs
Commercial General Liability ("CGL") policies typically provide two distinct benefits to policyholders: defense against potentially covered claims, and indemnity against covered claims. Because the duty to defend is broader than the duty to indemnify, it is as important, if not more important, than the duty to indemnify. <i>See, e.g., Buss v. Los Angeles Superior Court</i>, 65 Cal.Rptr.2d 366, 373, 939 P.2d 766, 773 (1997). Insurers often accept their defense obligations, however, subject to reservation of their rights to assert non-coverage. Now, with increasing frequency, insurers also are demanding reimbursement if it turns out that the liability claim was not covered.
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