Section 14.5 Duty to Defend

• Library: Insurance Practice 2015

To establish a claim for failure to defend, a plaintiff must show:

· issuance and delivery of a policy;

· payment of the premium;

· a loss caused by a peril insured against; and

· notice and proof of loss to the insurer.

Kauble v. MFA Mut. Ins. Co., 637 S.W.2d 831 (Mo. App. E.D. 1982).

The duty to defend is broader than the duty to indemnify. See Millers Mut. Ins. Ass’n of Ill. v. Shell Oil Co., 959 S.W.2d 864 (Mo. App. E.D. 1997). Many times a carrier defends a suit where no indemnity will be owed. Id. These circumstances generally involve defense under a reservation of rights. “A reservation of rights letter is a unilateral declaration . . . that the company accepts the defense . . . but reserves its right to later deny coverage.” Pink v. Knoche, 103 S.W.3d 221 (Mo. App. W.D. 2003).

An insurer’s obligation to defend is also a right to defend. Depending on the language of the policy, once an insurer recognizes its right and duty to defend, it usually is afforded control over the litigation to protect its financial interests. The duty to defend is determined by comparing the language of the insurance policy with the allegations in the complaint. To suggest that the insured must prove the insurer’s obligation to pay before the insurer is required to provide a defense would make the duty-to-defend provision a hollow promise. If the complaint merely alleges facts that give rise to a...