Pennsylvania Federal Court Holds Insurer Can’t Use Insured’s Admission to Withdraw Defense

It has long been the rule, under Pennsylvania law, that an insurer’s duty to defend is determined “solely” by the allegations in the “four corners” of the complaint against the insured. Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888, 896 (Pa. 2006). A corollary of that rule —

How Law Firms Purchase Malpractice Insurance and What it Means for the Future of Legal Practice

First Aid Kit

Insurers have a number of tools at their disposal to change the behavior of their policyholders. This should be relatively unsurprising. Once an insurer indemnifies a policyholder from loss, it is the insurer’s money at risk, not the policyholder’s—if the policyholder suffers a loss, the insurer must pay the cost of the loss. And insurers hate to lose money just like you and me. It is therefore in the insurer’s interest to either demand or encourage policyholders to take more precaution.