Idaho Property and Casualty Practice Exam 2025 – Your Complete All-in-One Guide to Exam Success!

The "duty to defend" in liability insurance refers to the insurer's obligation to provide a legal defense for the insured against claims made that are covered by the policy. This duty is fundamental in liability insurance because it ensures that the insured has legal representation even if the claims are ultimately found to be without merit.

This duty is often broader than the duty to indemnify, meaning that even if a claim might not result in a payout if it is resolved in the insured's favor, the insurer still has to cover the costs of defending against that claim. This can include costs associated with lawyers, court fees, and other legal expenses. The rationale behind this duty is to protect the insured from the potentially high costs of legal defense, providing peace of mind that they will not face these financial burdens alone in the event of a liability claim.

In contrast, the other options do not accurately capture the essence of the "duty to defend." The insured finding their defense or paying for their own legal costs contradicts the principle of coverage provided by the insurer. Additionally, the insurer's right to refuse defense in certain cases is not part of the general duty but rather exceptions to it, typically outlined in the policy.