Towne Realty, Inc. v. Zurich Insurance

This case presents the following three issues concerning the breach of an insurer's duty to defend and the resulting damages from such a breach: (1) what constitutes a "tender of defense" under an insurance contract; (2) whether legal defense expenses incurred before the tender are allowable as damages; and (3) when, if ever, is an insurer responsible for the legal expenses involved in pursuing a countersuit. We hold that a tender of defense occurs when the insurer has notice that there is a claim against the insured. Further, we hold that even if an insurer does breach its duty to defend,…