Insurers risk hefty bill if they (erroneously) conclude they have no duty to defend

Insurance companies who conclude that they have no duty to defend an insurer facing an action, and by extension no obligation to indemnify, risk being surprised with a hefty bill, following a ruling by the Quebec Court of Appeal.

In a ruling that repeatedly hammers the distinction between a liability insurer’s duty to defend with its obligation to indemnify, the appeal court warns insurance companies that it cannot come to the hasty conclusion that it has no duty to indemnify simply because it has no duty to defend.

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