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Tag Archives: Duty to Defend

Insurance – Duty to Defend – Commercial Lines Policy – Separation of Insureds (access required)

Universal Insurance Co. v. Burton Farm Development Co. In an underlying lawsuit, a subcontractor alleges that the defendant-developer’s project manager defamed the subcontractor and intentionally caused a breakdown of the contractual relationship between the subcontractor and the developer. Even though the project manager’s commercial lines insurance policy – which names the developer as an additional insured — contains an exclusion for injury “done by or at the direction of the insured with knowledge of its falsity,” since the policy treats each insured separately, the insurer is required to defend the developer against the subcontractor’s claims against it.

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Insurers needed actual notice to trigger duty to defend claim (access required)

North Carolina has joined a majority of jurisdictions that require a policyholder to provide actual notice to an insurer of a claim before a duty to defend arises. Winston-Salem attorney Garth Gersten (pictured) described the March 15 ruling by the Court of Appeals as "important both for insurance companies and policyholders because it emphasizes that policyholders need to provide notice of claims as soon as possible to their carriers. Notice is not a luxury; it is sound risk management."

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