Fighting For 'Right' Of Reimbursement

Law360, New York (May 4, 2011, 12:54 PM EDT) -- Do insurers have a “right” to claw back defense costs if it turns out that a claim they defend is ultimately found not to be covered? Many insurers claim they do, but general liability policies typically have no express provisions allowing it.

Insurers nonetheless often accept their defense obligations subject to reservation of their rights to assert noncoverage and also purporting to reserve their alleged right to reimbursement. Courts, however, do not uniformly agree that insurers can claw back defense costs; indeed, a fair number hold...
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