Home > Property & Casualty > Duty to Defend/Non Duty to Defend – Do you understand the difference?

Duty to Defend/Non Duty to Defend – Do you understand the difference?

smallclaimspixInsurance professionals frequently encounter “duty to defend” clauses in general liability policies and while handling third-party claims for clients.  However, insurers and policyholders are often less-familiar with the language surrounding “non duty to defend” provisions, especially those found in Director’s and Officer’s Liability (D&O) and Employment Practices Liability (EPL) policies.

The comparisons below describe the differences between the two clauses, and highlight the rights and duties of the insured and insurer in each type of case.

Duty to Defend: in a duty to defend policy, the insurer has the right and duty to defend a claim. 


  • The insured has access to the insurers panel counsel list, or is provided a defense by a firm selected by the insurer. These firms are experienced attorneys and work for pre-negotiated rates with the insurer.
  • The insured hands over the claim to the insurer, who does most of the heavy lifting and handles the day-to-day work in settling the claim.
  • The insurer is obligated to defend all allegations of the claim, which means if there are covered and uncovered matters; the insurer cannot allocate defense costs, and must pay the whole tab. This can be a big advantage to clients. They can and will still allocate any indemnity payments.


  • The insured typically is not able to use their own counsel. They will be required to use the law firm the carrier chooses for them.
  • The insured will have less control over the day-to-day control of the claim.

Non-Duty to Defend: In a non-duty to defend policy, the insured the right and duty to defend a claim.


  • The insured gets to choose the counsel they want to use (subject to the insurer’s approval), however, Insurer may require panel counsel for certain types of claims including securities claims, class actions claims or claim asserting retaliation.
  • The insured can assert more control over the day-to-day activity of the claim


  • he insurer will allocate defense costs between covered and uncovered matters.
  • The insurer will be much tougher regarding what are reasonable attorney fees billed by the law firm based on the Litigation Management Guidelines agreed to with the insurer.

For more information about “duty to defend “ and “non duty to defend” provisions in your Management Liability Insurance policy, please contact your WGA Client Executive or WGA’s ExecutiveRisk Practice.

About the Author

Mark Stiles is an Assistant Vice President at William Gallagher Associates and a member of the ExecutiveRisk Practice. He works with private and nonprofit organizations to assist them and their executives with protection for their exposures to Directors’ & Officers’ Liability, Employment Practices Liability, Fiduciary Liability, Crime, Kidnap & Ransom and Extortion.

617.646.6743 | Mstiles@wgains.com | Connect with Mark on LinkedIn |

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