Strategies, Challenges, and Answers

The Duty To Defend Is Broader Than The Duty To Indemnify

duty-to-defendThe 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 Court has often looked to persuasive precedent from other jurisdictions, especially California. Zurich Am. Ins. Co. v. Coeur Rochester, Inc., 720 F. Supp. 2d 1223, 1234 n. 11 (D. Nev. 2010). In Jaynes Corp. v. Am. Safety Indem. Co., 925 F. Supp. 2d 1095, 1103 (D. Nev., 2012) vacated due to settlement, No. 2:10-CV-00764-MMD, 2014 WL 8735102 (D. Nev. Dec. 3, 2014), the U.S. District Court, District of Nevada relied almost exclusively on California precedent, and concluded the following would be Nevada is ruled on by the Nevada Supreme Court:

  • “The insurer must defend any action that asserts a claim potentially seeking damages within the coverage of the policy”; howpever, the duty to defend is dependent on at least potential coverage. Id.
  • “The duty to defend may exist even where coverage is in doubt and ultimately does not develop.” Id.
  • “For an insurer, the existence of a duty to defend turns not upon the ultimate adjudication of coverage under its policy of insurance, but upon those facts known by the insurer at the inception of a third party lawsuit.”

The court went on to say:

The duty to defend, although broad, is not unlimited; it is measured by the nature and kinds of risks covered by the policy. Where there is no potential for coverage, there is no duty to defend. . . . Accordingly, in resolving the question of whether a duty to defend exists, the insurer has a higher burden than the insured. The insured need only show that the underlying claim may fall within policy coverage; the insurer must prove it cannot; the insurer, in other words, must present undisputed facts that eliminate any possibility of coverage.

Id. (internal citations and punctuation omitted).

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