Nichols v. American Employers Insurance

The issue is whether the insurer in this case had a duty to defend its insured in a sexual harassment action before the Equal Rights Division, of the Department of Industry, Labor and Human Relations. The trial court agreed with the insured that since the insurance policy provided for coverage against defamation claims and since a defamatory statement was arguably subsumed within the sexual harassment action, there was a duty to defend. We hold that this insurer was not required to defend where it was not bound to indemnify should the injured party prevail upon her allegations. We therefore…