Insurer Found Liable for Litigation Costs After Continuing to Contest Duty to Defend

An insurer that continued to contest its duty to defend after a court ruled on the issue is liable for the subsequent litigation costs, the U.S. District Court for the Southern District of New York has held (Narragansett Elec. Co. v. Am. Home Assurance Co., S.D.N.Y., No. 11-CV-8299).

Applying Massachusetts law in the Feb. 14 decision, the court declined to adopt an insurer’s argument that it has no obligation to pay any legal fees incurred once the duty to defend was established by declaration.

The court ordered insurer Century Indemnity Co. to pay all defense costs incurred ...