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The Duty to Defend in New Jersey

By Daren S. McNally and and Matthew I. Gennaro

It is often noted that the best defense is a good offense. This is as true in litigation as it is in sports, since the most vigorous defense is one that is proactive, not reactive; one that does not sit back on its heels, but rather takes the accusations and arguments against it head-on. From a policyholder's perspective, however, it can be argued that the best defense is one that the insurer is required to pay for.

In that regard, the question of whether and to what extent an insurer is obligated to undertake the defense of a lawsuit is not always easily answered. In particular, while it is well-established insurance law that the duty to defend is generally broader than the duty to indemnify, it is also axiomatic that an insurer has no obligation to defend a claim for which there is no possible indemnification obligation under the applicable policy. This begs the question, of course, regarding how to handle the situation ' as so often happens ' when a complaint against a policyholder alleges multiple causes of action: some that are indemnifiable and some that plainly are not.

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