What is a duty to defend clause?

A duty to defend clause is a type of insurance policy language found in California insurance policies. This clause is an obligation for the insurance company to defend a policyholder if they are sued for a claim that is covered by the policy. This means that the insurance company agrees to pay any costs associated with a third-party lawsuit, such as an attorney’s fees and the cost of any damages the policyholder may be found liable for. The duty to defend clause is important because it protects policyholders from having to pay for the costs of defending themselves in a costly lawsuit. Without this clause, the policyholder would be responsible for the costs associated with their legal defense. This would be an unexpected and often financially devastating experience. The language of the duty to defend clause is often very specific and must be carefully read to understand exactly what is covered. It is important for policyholders to understand the scope of their insurance coverage and to be aware of any potential gaps that may exist between the coverage they have and the situation they find themselves in. Understanding the duty to defend clause helps policyholders to protect their financial interests and to be prepared if they are ever sued.

Related FAQs

What is a contractual liability insurance policy?
How do I know if an insurance claim has been settled?
What is a claim for bad faith?
How is an insurance claim payout determined?
What are the consequences of making a false statement on an insurance claim?
What is a policy limit?
What is a collateral source rule?
How do I calculate a claim settlement?
What is a claim form?
What are the different types of insurance policies?

What is a duty to defend clause?

Related FAQs

Related Blog Posts