How many times have you seen a court decision or commentary
stating that the duty to defend is broader than the duty to
indemnify? A lot I bet. Essentially, a policy with a
duty to defend provides "litigation" insurance to the
policyholder, even though the claim may never result in any
indemnity payment. Most courts will liberally construe the
allegations in the complaint and generously interpret the
provisions of the insurance policy to find the duty to
defend. A recent First Circuit case construing Maine law
provides another example of exactly how broad the duty to defend is
as interpreted by many courts.
In Zurich American Insurance Co. v.
Electricity Maine, LLC, No. 18-1968 (1st Cir. Jun. 17,
2019), a D&O insurer brought a declaratory judgment action in
Maine federal court for a declaration that it had no duty to defend
the policyholder against an underlying putative class action over
alleged misconduct in charging customers high electric bills.
The
