Illinois’ Broad Duty to Defend Rule Is Put to the Test, and Prevails, for Now: Philadelphia Indemnity Insurance Co. v. Chicago Title Insurance Co.

   By David Rosenfield, Attorney, Reed Smith LLP

Illinois and numerous other jurisdictions adhere to the long-standing rule that if an insurer has a duty to defend a single count in a multi-count complaint, then it has a duty to defend the entire complaint.  When an insurer recently tried to avoid this default rule by drafting its policy so that it only covered certain "stated causes of action," an Illinois district court rejected that argument and held that the long-standing duty to defend rule is a rule "implied in law," and not one based on policy construction/interpretation.

In reaching its conclusion, the Illinois court recognized that the issue was one of first impression in Illinois and consequently looked to the law of other jurisdictions for guidance.  Particularly because the ruling came from an Illinois district court, rather than a state court, it is surely to be tested in the near future, likely by insurers who presumably charged lower premiums for their narrower policy language.  Nevertheless, for now, Illinois' long-standing rule that as long as an insurer has a duty to defend a single count in a complaint it has a duty to defend the entire complaint, regardless of contrary policy language, remains intact.

David is a member of Reed Smith's Insurance Recovery Group in New York, which he joined in 2007.  Prior to that, David was a member of Winston & Strawn's commercial litigation group in Chicago.  As an insurance recovery attorney, David represents policyholders in insurance coverage disputes, including negotiation, mediation, litigation and other forms of dispute resolution.  David's practice includes areas such as CGL and mass property insurance, directors' and officers' liability, professional errors and omissions liability, employment practices liability, fiduciary liability, workers' compensation, aircraft, marine, mortgage and kidnap and ransom insurance.

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