Does the Draft Restatement of the Law of Liability Insurance Wrongly Elevate Proof and Overvalue Legal Uncertainty? Yes, Given the Foreseeable Risk Insurers May More Often Decline the Duty to Defend as a Result
30 Pages Posted: 7 Sep 2016 Last revised: 19 Oct 2016
Date Written: September 2, 2016
Abstract
Tentative Draft No. 1 of the American Law Institute’s forthcoming Restatement of the Law of Liability Insurance is admirable in many important respects. However, proposed section 13 can be falsified in too many instances to serve as a meaningful statement of black letter law governing an insurer’s duty to defend. This Commentary will consider how proposed section 13 and associated provisions of the proposed Restatement might influence the decision by insurers to defend their insureds, particularly in instances of so-called “legal uncertainty.”
Keywords: Duty to Defend, Liability Insurance, Restatement of the Law of Liability Insurance, Breach of the Duty to Defend, Breach of the Implied Covenant of Good Faith and Fair Dealing, Insurance, Breach of Contract, Hadley v. Baxedale, recoup defense costs, excess liability, legal uncertainty, ambiguity
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