Photo: Wutzkoh via Adobe Stock New York Courts Reject Insurance Companies' Attempts to Recoup Defense Costs
Recently, several New York courts have held that an insurance company has no right to recoup defense costs where the insurance policy includes a duty to defend, but does not include an express contractual provision allowing for recoupment.
May 24, 2024 at 10:00 AM
9 minute read
Under a liability insurance policy, an insurance company promises to defend its policyholder and provide "litigation insurance" Continental Casualty v. Rapid-American, 80 N.Y.2d 640, 648 (1993). Thus, when an insurance company defends a policyholder in litigation, the policyholder does not expect the insurance company to demand that the policyholder pay it back.
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