NY Strikes Fear Into Insurers Waffling On Defense Coverage

Law360, New York (June 12, 2013, 8:52 PM EDT) -- The New York Court of Appeals rattled insurers Tuesday when it punished American Guarantee & Liability Insurance Co. for violating its duty to defend by holding the insurer could no longer rely on policy exclusions to avoid covering an underlying judgment, making clear that such breaches will come with heavy consequences.

New York's high court found that insurers that wrongly refuse to defend their policyholders can only litigate the validity of their disclaimer of coverage and can no longer point to policy exclusions that otherwise would...
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