Section 9.21 Inclusion of Defense Costs

• Library: Insurance Practice 2015

Insurers have litigated the issue of whether the costs of defending claims operate to deplete the applicable policy limit. Some courts have decided that defense costs should be treated no differently than any other element of covered loss and should be applied against the dollar amount of coverage available to the insureds. See Helfand v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 13 Cal. Rptr. 2d 295, 299–302 (Cal. Ct. App. 1992). Other decisions, based either on a construction of the policy or on...