Defense-within-Limits policies encourage insurers and policyholders to keep an eye on expenses to ensure a best-case outcome.

Most liability insurance contracts treat defense expenses as outside the policy limit. Such is not the case in defense-within-limits (DWL) policies, though. Detractors call them wasting, cannibalizing or self-liquidating policies since defense fees can consume the policy limit. DWL policies appear prominently in D&O coverage, legal and medical malpractice policies and now in some commercial general liability policies.

Defense-within-limits policies are attractive to insurers and policyholders alike. For insurers, capping the company’s responsibility for legal fees is appealing. Instead of funding unlimited defense fees, an insurer knows that on a $1 million policy, it will pay no more than $1 million in legal fees and settlement payments, max.

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.


  • All news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including and

Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.



Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join now!

  • Unlimited access to - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including, and
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2024 ALM Global, LLC. All Rights Reserved.