What is the "duty to defend" in liability policies?

The concept of the "duty to defend" in liability policies refers specifically to the insurer's obligation to provide legal defense on behalf of the insured when a claim is made against them. This means that the insurance company is responsible for paying for the legal costs incurred in defending against lawsuits covered under the policy, regardless of the merits of the claim.

This duty is fundamental because it recognizes the potential expenses associated with legal defense, which can be substantial. The insurer's obligation extends even if the claims ultimately turn out to be unfounded or if the actual policy coverage limits may not completely satisfy the claim. The duty to defend is broader than the duty to indemnify, which only comes into play when there is an actual liability to be paid.

In contrast, the other options do not accurately define the "duty to defend." For example, while the obligation to provide coverage for all claims might sound relevant, not every claim will be covered, as it depends on the specifics of the policy. Quick settlement of claims might be a good practice, but it is not a defining feature of the duty to defend. Advising on policy limits is also not part of this duty; rather, it involves ensuring that the insured understands the extent of their coverage, but this