In tort litigation — asbestos bodily injury tort litigation in particular — corporations occasionally are served with (and become parties to) lawsuits in which the plaintiffs named the wrong entity as a defendant to the action. In those instances, does the wrongly named corporation's insurance company have a duty to defend the action? In a word, yes.
Let's consider the hypothetical company of "Smith Insulation, Inc." Surely a risk manager or claim handler can imagine instances in which Smith Insulation, Inc. is served with a complaint that names some variation of the company's name as a defendant, such as "Smith." That is not uncommon in asbestos litigation. Even if Smith Insulation, Inc. was wrongly named as a defendant — perhaps there was another company with a similar name, like Smith Insulators Corporation, that allegedly caused the injury or damage — Smith Insulation, Inc. should be defended by its insurer(s) nonetheless.
Standard form general liability insurance policies have a duty to defend policyholders, even if the claims against the policyholders are groundless, false, or fraudulent. When a complaint, if liberally construed, could be covered under a policy with a duty to defend, the insurance company "must come forward to defend the insured no matter how groundless, false or baseless the suit may be."
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
- Educational webcasts, resources from industry leaders, and informative newsletters.
- Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.