What does “duty to defend” imply in liability insurance contracts?

In liability insurance contracts, the concept of "duty to defend" refers to the insurer's obligation to provide a legal defense for the insured against claims that fall within the coverage of the policy. This means that if a claim is made against the insured for a covered incident, the insurer is responsible for hiring and paying for legal counsel to defend the insured in court. This obligation exists even if the claims are ultimately found to be without merit.

The duty to defend is a critical aspect of liability insurance because it emphasizes that the insurer has an integral role in protecting the insured's interests during legal disputes. This responsibility is typically broader than the insurer's duty to indemnify, which is the obligation to pay for damages arising from a covered claim. While the insured remains responsible for paying any deductibles or uncovered amounts, the insurer must defend against any claim that could potentially fall within the policy's coverage. By understanding this concept, policyholders can be aware of the protections their liability insurance provides.