What does Defense Costs Endorsements mean? Read on to discover the definition & meaning of the term Defense Costs Endorsements - to help you better understand the language used in insurance policies.
Defense Costs Endorsements
For use on commercial general liability (CGL) policies, these nonstandard endorsements state that if the insurer agrees to provide a defense to an insured, but it is later determined that the claim would not be covered by the policy (and thus there is no duty to defend), the insurer is entitled to reimbursement of defense costs incurred up to that point. The endorsement is intended to comply with court rulings in some states that the insurer's right to reimbursement must be preserved in the language of the insurance policy. Some of the endorsements require the insurer to give written notice that coverage may not apply (a reservation of rights letter) and of the insurer's intent to seek reimbursement of defense costs in the event the claim is determined not to be covered.
We hope the you have a better understanding of the meaning of Defense Costs Endorsements.