General liability insurance policies are designed to provide coverage for a wide range of potential risks that businesses face in their day-to-day operations. These policies typically provide coverage for bodily injury, property damage, personal and advertising injury, and other liability exposures.
One of the most important features of a general liability insurance policy is the duty to defend. Under this duty, the insurance company is responsible for providing a defense for the policyholder against any covered claim, regardless of whether the claim has merit or not. This means that the insurance company must pay for the costs of defending the claim, including legal fees, expert witness fees, and other expenses.
The duty to defend is considered to be broader than the duty to indemnify. While the duty to defend requires the insurance company to provide a defense for the policyholder, the duty to indemnify only requires the insurance company to pay for damages or losses that the policyholder is legally obligated to pay. This means that even if the insurance company ultimately determines that it is not responsible for indemnifying the policyholder, it still has a duty to defend the policyholder against the claim.
The reason for the broader duty to defend is based on the fact that defending a claim can be costly and time-consuming, and can have a significant impact on the policyholder’s business. By providing a defense, the insurance company can help protect the policyholder from the financial and reputational harm that can result from a lawsuit, regardless of whether the policyholder is ultimately found to be liable.
In addition to the duty to defend, general liability insurance policies typically include a number of other important features, such as coverage limits, exclusions, and deductibles. These features are designed to help the insurance company manage its risk and ensure that it is able to provide coverage to policyholders when they need it.
General liability insurance policies provide important coverage for businesses facing a wide range of potential risks. The duty to defend is one of the most important features of these policies, as it requires the insurance company to provide a defense for the policyholder against any covered claim. While the duty to indemnify is also an important feature, the duty to defend is considered to be broader, as it helps protect the policyholder from the financial and reputational harm that can result from a lawsuit.
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