Kristen Matteoni, ‘The Right to Reimbursement: Nevada Courts Should Follow the Trend and Forbid Insurers from Seeking Recoupment of Defense Costs’

Introduction:
Over the last twenty years, a battle has emerged between insurers and policyholders concerning which party should bear the burden of defense costs. This issue, which has yet to be settled in many jurisdictions, focuses on whether commercial general liability (‘CGL’) policies allow for insurers to be reimbursed for the costs of defending claims that are later found not to be covered under the insurance policy. Logically, insurance companies argue that because the claims were found not to be covered by the policy, they should not bear the costs of their defense. However, the arguments that policyholders make are equally logical. Policyholders argue that insurance companies have significantly more bargaining power than policyholders and that principles of equity and fairness should prohibit insurers from determining at some later date that the policyholder should pay defense costs. In response to such claims, policyholders typically argue that insurers are attempting to add new terms to the insurance contract and thus are seeking payment for benefits that were not bargained for or agreed to in the original policy …

Matteoni, Kristen (2016) “The Right to Reimbursement: Nevada Courts Should Follow the Trend and Forbid Insurers from Seeking Recoupment of Defense Costs“, Nevada Law Journal: vol 17 : iss 1, article 11.

First posted 2017-02-08 06:41:36

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