Strategies, Challenges, and Answers

When Is An Insurer Responsible For Pre-Tender Defense Costs?

The Nevada Supreme Court has not decided whether an insurance company is obliged to reimburse its insured for defense costs incurred prior to the tender of the claim to the company.  However, in many instances, where Nevada law is silent, Nevada looks to California law for direction.  See Zurich Am. Ins. Co., 720 F. Supp. 2d 1223, 1234 n. 11 (2010).  See also Commercial Standard Ins. Co. v. Tab Constr., Inc., 94 Nev. 536, 539, 583 P.2d 449, 451 (1978) (relying on the California Supreme Court’s … [Read more...]

In Deciding Whether An Insurance Company Has A Duty To Defend Its Insured, Will Nevada Courts Look Beyond The Four Corners Of The Complaint?

In deciding whether an insurance company has a duty to defend its insured, courts have often said that they will not look beyond the “four corners” of the plaintiff’s complaint. If the allegations of the Complaint allege facts that fall within coverage, there is a duty to defend. If not, there is no duty. In the case of United Nat’l Ins. Co. v. Frontier Ins. Co., 120 Nev. 678, 687, 99 P.3d 1153, 1158 (2004) the Nevada Supreme Court enunciated the rule it would follow in making the duty to … [Read more...]

The Duty To Defend Is Broader Than The Duty To Indemnify

The duty to defend is broader than the duty to indemnify because the duty to defend covers not just claims for which the insured is liable, but also claims for which the insured could be found liable. United Nat’l Ins. Co. v. Frontier Ins. Co., 120 Nev. 678, 687, 99 P.3d 1153, 1158 (2004). Where there is no potential for coverage, there is no duty to defend. Bidart v. Am. Title Ins. Co., 103 Nev. 175, 179, 734 P.2d 732, 734 (1987). When interpreting insurance policy terms, the Nevada Supreme … [Read more...]

Settlement, Unsettled

The claimant’s counsel makes a policy limit demand. After receiving authority to settle for the liability limits, you tender the policy limit and your company’s standard Release.  Claimant’s counsel rejects the Release.  Instead, counsel insists on a Covenant Not to Execute.  Why would the attorney do that? This post will hopefully give you more information regarding the distinctions between these two types of settlement documents and the advantages and disadvantages of each. What is the … [Read more...]

What Type of Proceedings Must a Nevada Insurer Defend?

Most liability policies obligate the insurance company to defend its insured in case of a “suit”.  So what proceedings constitute a “suit” that an insurer must defend?  Assuming a duty to indemnify for damages based on a theory of liability put forth in the Complaint, the insurance company has a duty to defend such a lawsuit.  State Farm Mut. Auto. Ins. Co. v. Hansen, 131 Nev. Adv. Op. 74, 357 P.3d 338 (2015).  However, the Nevada Supreme Court has not faced a decision as to whether that duty … [Read more...]