Defending 'Wasting Limits' In Insurance Policies

Law360, New York (May 12, 2016, 10:54 AM EDT) -- Insurers have increasingly adopted provisions within general liability policies that provide for "wasting limits" — provisions which reduce the available limits of coverage as defense costs are incurred. These types of provisions are especially prevalent where insurers add on coverage with respect to certain types of claims. For example, where an insurer seeks to limit the scope of its obligations with regard to tort claims that would otherwise be entirely excluded under the policy.

Most liability policies provide for two main components: defense and indemnity. North...
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