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 interpretation of California statute when interpreting a similar Nevada statute).

Assuming Nevada will follow California precedent, an insurer is not liable for pre-tender defense costs.  N. Ins. Co. of N.Y. v. Allied Mut. Ins. Co., 955 F.2d 1353, 1361 (9th Cir. 1992) (enforcing policy provision precluding reimbursement to insured for defense costs voluntarily incurred before tender, but holding that an insurer may be liable to a co-insurer for pre-tender expenses incurred before the defense was tendered to the insurer); see also Xebec Dev. Partners, Ltd. v. Nat’l Union Fire Ins. Co., 12 Cal. App. 4th 501, 564-5, 15 Cal. Rptr. 2d 726, 762-3 (App. 1993), disapproved of on other grounds by Essex Ins. Co. v. Five Star Dye House, Inc., 38 Cal. 4th 1252, 137 P.3d 192 (2006).

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