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Recoupment of defense costs (defense fees and costs) by insurers in the absence of a duty to indemnify under a liability policy is an unsettled issue in many states. In a
recent decision, a New York intermediate appellate court held that even though there was no duty to indemnify an underlying personal injury action under a CGL policy, the insurer could
not recoup the defense costs it had advanced under a reservation of rights (ROR) letter where the policy at issue provided for a duty to defend but did not contain an express contractual provision allowing for the recoupment of such defense costs. This decision, however, by a court for one of four judicial departments in New York, is contrary to other state and federal decisions allowing recoupment under New York law and should be limited to its facts.
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Insurer Needn t Cover Forklift Driver In $1M Injury Suit
Law360 (January 6, 2021, 9:47 PM EST) A California federal judge freed Indian Harbor Insurance Co. from having to defend a forklift driver in a $1 million suit alleging he injured a bystander during a forklift parade, finding that the parade is a stunting activity barred by the policy s mobile equipment exclusion.
U.S. District Judge John F. Walter said Monday that Indian Harbor has no duty to defend the forklift driver, but denied the insurer s summary judgment motion regarding its right to deny coverage to the driver s company in the underlying motion.