Failure to Prove an Accident Defeats Liability Insurance Claims
The duty to defend is not limited to cases where the suit against the insured is viable. The duty extends to those that are brought against the insured that are bad, false, or fraudulent.
In Wild v. Subscription Plus, Inc., 292 F.3d 526 (7th Cir. 05/31/2002) the Seventh Circuit was faced with a dispute over the duty to defend when there was a finding that the insurer, Scottsdale, had no duty to indemnify the two insureds, because the accident was not covered by the policy after all. Scottsdale appealed the judgment that it had a duty to defend. It also appealed from the court’s correlative order, based on Oklahoma insurance law, that it reimburse the insureds for the expense of defending against the tort suit.
An insured has the burden of proving that a claim falls within the coverage of the policy. Addison Insurance Co. v. Fay, 376 Ill.App.3d 85, 88, 314 Ill.Dec. 680, 875 N.E.2d 190 (2007). Once the insured satisfies this burden, the insurer has the burden of proving that the loss was limited or excluded by a contract provision. Stoneridge Development Co. v. Essex Insurance Co., 382 Ill.App.3d 731, 749, 321 Ill.Dec. 114, 888 N.E.2d 633 (2008).
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Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
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