Strategies, Challenges, and Answers

The Duty To Defend Continues Through The Entire Litigation

Once the duty to defend arises, the insurer’s duty continues throughout the entire litigation.  United Nat’l Ins. Co. v. Frontier Ins. Co., 120 Nev. 678, 687, 99 P.3d 1153, 1158 (Nev. 2004).  The duty to defend continues until final resolution of the claim.  Allstate Ins. Co. v. Miller, 125 Nev. 300, 309, 212 P.3d 318, 325 (2009).  An insurance company may not terminate its duty to defend by depositing the insurance proceeds with the court when the policy terms are ambiguous as to whether the policy specifically permits such an action.  Benchmark Ins. Co. v. Sparks, 127 Nev. Adv. Op. 33, 254 P.3d 617, 623 (2011).

As to the duty to appeal, Nevada would likely follow California requiring a duty to appeal only in certain circumstances.  See Jenkins v. Ins. Co. of N. America, 220 Cal. App. 3d 1481, 1489, 272 Cal. Rptr. 7 (App. 1990) (holding that “a duty to defend may include the duty to appeal where reasonable grounds for an appeal exist”). 

The statute of limitations on a claim against an insurer for breach of its duty to defend commences when a final judgment in the underlying litigation against the insured is entered.  Home Sav. Ass’n v. Aetna Cas. & Sur. Co., 109 Nev. 558, 565, 854 P.2d 851, 855 (1993) (“[T]he limitation period for an action under a[n] . . . insurance policy for failure to defend accrues when the insurer refuses the insured’s tender of defense, but is tolled until the underlying action is terminated by final judgment”) (citing Lambert v. Commonwealth Land Title Ins., 53 Cal. 3d 1072, 1080, 811 P.2d 737, 741-42 (1991)).

If you have questions about the duty to defend in Nevada, please contact Mike Mills at Bauman Loewe Witt & Maxwell either by phone at 702-240-6060 or by email at mmills@blwmlawfirm.com

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