Century Surety Co. v. Andrew

The Supreme Court answered a certified question submitted by the United States District Court for the District of Nevada by holding that, under Nevada law, an insurer’s liability where it breaches its contractual duty to defend is not capped at the policy limits plus any costs incurred by the insured in mounting a defense. Instead, an insurer may be liable for any consequential damages caused by its breach. Further, good faith determinations are irrelevant for determining damages upon a breach of the duty to defend.Respondents filed suit against Appellant-insurer for breach of contract and other causes of action. The federal court concluded that Appellant did not act in bad faith but did breach its duty to defend. The federal court subsequently entered an order staying the proceedings until resolution of the certified question by the Supreme Court. The Supreme Court answered as set forth above, holding that an insured may recover any damages consequential to the insurer’s breach of its duty to defend, and therefore, an insurer’s liability for breach of that duty is not capped at the policy limits, even if the insurer did not act in bad faith. View "Century Surety Co. v. Andrew" on Justia Law