It’s time for the next installment of Holcomb Dunbar law series “Insurance Law from A to Z.” This was put together by our litigation group who practice in the insurance law arena. Of course, if you have questions about these or any other topics please do not hesitate to contact us.
This week’s installment – Duty to Defend
The obligation of a liability insurer to defend is determined by the allegations of the complaint or declaration. Farmland Mut. Ins. Co. v. Scruggs, 866 So. 2d 714, 719 (Miss. 2004). If the allegations made against the insured bring the action within the coverage of the policy he is entitled to a defense, even though the actual facts later reveal that the claims as presented were not within coverage. Cullop v. Sphere Drake Ins. Co., 129 F. Supp 2d 981, 982 (S.D. Miss. 2001).
An insurer also has a duty to defend where a complaint fails to state a cause of action covered by the policy but the insurer is informed that the true facts are inconsistent with the complaint, or where the insurer learns from an independent investigation that the true facts present the potential liability of the insured. Farmland, 866 So. 2d at fn. 2. (citing Mavar Shrimp & Oyster Co. v. U.S. Fidelity & Guar. Co., 187 So.2d 871, 875 (Miss. 1966).
An insurer has a duty to defend only claims within coverage. An insurer that defends claims under a reservation of rights is required to permit the insured to select counsel of his choice, paid for by the carrier. Moeller v. American Guar. And Liability Ins. Co., 707 So. 2d 1062, 1069 (Miss. 1996).
The information contained in this post is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, there may be omissions or inaccuracies in information contained in this report. Accordingly, the information in this report is provided with the understanding that the authors are not herein engaged in rendering legal, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with legal or other competent advisers. Before making any decision or taking any action, you should consult with your counsel or the attorneys at Holcomb Dunbar.