A recent California Court of Appeal, Fourth District case held that an insurer was obligated to defend its insured immediately, despite the fact the insured had not satisfied a $250,000 self-insured retention (SIR) because the SIR provision applied only to the insurer’s indemnity obligation. The case, American Safety Indemnity Co. v. Admiral Insurance Co., Case No. D061587 (Super. Ct. No. 37-2010-00092157-CU-IC-CTL), arose from a construction defect action filed against the developer by numerous homeowners in Santa Clarita.
The ruling was based on the specific language in the subject insurance policy, which stated that the SIR provision limited the insurer’s duty to pay “damages” only and did not mention its duty to defend. As such, under that language, the court found that the insurer had an immediate duty to defend.
For an in-depth discussion and analysis of this case, please click here.
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