Duty to Defend in Litigation: Strategic Insights for Policyholders and Insurers

Adrian C. Azer | Haynes Boone

Adrian Azer exclusively represents corporate policyholders in a variety of complex insurance coverage matters. Clients seek Adrian’s representation in connection with insurance recovery for cybersecurity breaches and mass tort claims, disputes over general liability coverage for various toxic tort and environmental claims, and disputes over directors’ and officers’ coverage. Adrian also counsels’ clients in bankers professional liability (BPL) matters.

Adrian has represented public and private companies, non-profit entities, and government contractors, and has litigated against insurers in state and federal courts across the nation and in various arbitration tribunals. Having worked as a bankruptcy litigator for seven years, he has particular skill navigating insurance issues within the context of bankruptcy proceedings. Adrian is representing the Boy Scouts of America in connection with insurance coverage for claims of alleged sexual abuse.

Adrian is frequently called upon to write about insurance topics, including but not limited to several articles about issues related to COVID-19. Adrian’s articles on cyber insurance have been published in Inside Counsel magazine and in Law360.

Kevin V. Small | Hunton

Kevin is a commercial litigator focusing on insurance coverage disputes and counseling on behalf of policyholders. His educational background and prior experience as an insurance broker and advisor provide him with a deep understanding of the insurance industry, enhancing his ability to represent policyholders across a broad spectrum of policies. Kevin regularly represents clients in connection with claims under policies providing coverage for commercial property, cyber, builders’ risk, D&O, E&O, general liability, and representations and warranties. He also represents clients in professional liability matters, such as insurance broker malpractice.

Kevin frequently provides thought leadership on insurance issues. He writes extensively on insurance coverage, presents to industry professionals, and has been quoted in prominent publications. He is also a contributor to the Firm’s Insurance Recovery Blog.

While in law school, Kevin served as a judicial intern for the Honorable Cathy Waldor, USMJ, in the United States District Court for the District of New Jersey and as a legal intern in the United States Attorney’s Office for the District of New Jersey.

Before law school, Kevin studied Risk Management and Insurance at Temple University, which laid the foundation for his career in the insurance industry. He then worked for a leading risk management and insurance broking firm, where he advised Fortune 500 clients on structuring sophisticated risk management programs, brokered the insurance components, and serviced all risk management needs. This educational and professional background provides him with a deep understanding of the insurance industry, equipping him with unique insights and strategic advantages in handling complex coverage issues and disputes.

I. Duty to defend | 1:00pm – 1:15pm

• Duty to defend vs. duty to indemnify
• Origins in common law and modern interpretations in commercial insurance
• Strategic significance in early stages of litigation

II. When the duty is triggered: Legal framework and jurisdictional variations | 1:15pm – 1:30pm

• The “eight corners” or “four corners” rule
• Use of extrinsic evidence to trigger or deny defense
• Comparing insurer-friendly and policyholder-friendly jurisdictions
• How policy wording and endorsements influence the trigger

III. Reservation of rights and strategic implications | 1:30pm – 1:45pm

• Structuring effective reservation of rights letters
• When and how to disclaim coverage
• The impact of reservations on control of defense and conflicts of interest
• Reimbursement rights and insurer attempts to recover defense costs

IV. Conflicts, Cumis counsel, and control of defense | 1:45pm – 2:00pm

• Managing the tripartite relationship (insurer, insured, and defense counsel)
• When independent (Cumis) counsel is required or advisable
• Ethical and strategic risks in defending under reservation
• Cost-sharing and rate-setting disputes

Break | 2:00pm – 2:10pm

V. Litigation risks for breach of duty to defend | 2:10pm – 2:25pm

• Bad faith exposure for wrongful denial of defense
• Damages recoverable by insureds, including attorney’s fees and settlement costs
• Estoppel and preclusion doctrines arising from breach
• Key case law trends across jurisdictions

VI. Navigating complex claims and emerging trends | 2:25pm – 2:40pm

• Handling mixed claims with both covered and uncovered allegations
• Multijurisdictional and cross-border considerations
• Duty to defend in cyber, privacy, and environmental claims
• AI and evolving methods for automated claims handling and defense triggers