Insurer's Duty to Indemnify: Scope, Burden of Proof and Evidentiary Considerations

Most insurance coverage practitioners are intimately familiar with the law governing an insurer's duty to defend. But the insurer's duty to indemnify is often less well understood given the relatively little guidance in the case law and treatises.

And not only is the necessary legal analysis for the two duties fundamentally different, but the duty to indemnify also raises significant burden of proof and evidentiary issues.

While some courts have held that there must be a duty to defend before there is a duty to indemnify, others have found that an insurer must indemnify its insured even if the duty to defend never arises. And unlike an insurer's duty to defend—which turns on the pleadings and the policy—the duty to indemnify turns on the facts and circumstances giving rise to liability in the underlying dispute, allowing parties to introduce evidence during coverage litigation to establish or refute the duty to indemnify.

Listen as our panel of experienced insurance practitioners discusses and debates this complex area of insurance law and explains in practical terms how steps taken in the underlying case may affect the policyholder's ability to recover the cost of a settlement or judgment.

1. Overview
   1. Importance of duty to indemnify
   2. Specific legal analysis
   3. Burden of proof and evidentiary issues
2. Duty to indemnify distinguished from the duty to defend
3. Evidence necessary to establish (or defend against) a claim for indemnity
4. Application of the larger settlement rule in the D&O and other contexts
5. Final considerations

The panel will review these and other relevant issues:

• What standards are courts applying to determine the duty to indemnify?
• What strategies are available to the insurer and the policyholder when information outside of the liability policy and the pleadings potentially impacts whether a duty to indemnify exists?
• Which party has the burden of proof on the duty to indemnify and on which issues?
• What must be proved and how can that showing be rebutted?
• What is the burden that the insured must satisfy to prove coverage for a settlement or judgment?
• What defenses may be available to insurers faced with a demand for indemnity for a settlement or judgment?
• How does the characterization of settlement payments, or the wording of verdict forms, impact a client's ability to recover insurance proceeds?