The hallmark of a claims-made liability policy is coverage exclusively for claims “first made” during the policy period, thus limiting the insurer’s risk to new claims asserted against the policyholder during a finite time period. Insurers further reduce their risk by “deeming” related claims to be a single claim made on the earliest date the
The foundation of a policyholder’s agreement to pay premiums for a standard commercial general liability policy (CGL) is the insurer’s agreement to defend the policyholder against lawsuits and shoulder the costs of the defense. The insurer has “the right and duty to defend any ‘suit’” containing any allegation that potentially falls within the policy’s coverage.
Parties to a lawsuit may have vastly different perspectives on the validity and value of a claim, but as a matter of course, the issue of settlement will arise. Trial is an exceedingly expensive endeavor with an uncertain result. From a risk management perspective, the decision to settle is critical. Yet under liability policies that